Did Anyone Get Their Money Back from Quadriga?

Published: May 10, 2024 | Last Updated: May 11, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

If you’re one of the many who’ve asked, ‘Did anyone get their money back from Quadriga,’ the answer is complex. Creditors have seen some funds returned but not in full. This article explores the tangled web of QuadrigaCX’s collapse, the partial refunds issued, and the continuous legal efforts to return more to the exchange’s customers.

Did Anyone Get Their Money Back from Quadriga

Key Takeaways

  • Creditors of the collapsed Quadriga CX cryptocurrency exchange received a partial refund of 13% based on valuations from April 15, 2019, after approximately $34 million was recovered, mainly in cash assets, from the estate of founder Gerald Cotten.

  • QuadrigaCX’s failure was largely attributed to Gerald Cotten’s financial misconduct, including using client assets to cover personal trading losses totaling $115 million and fabricating account balances, operating the exchange like a Ponzi scheme.

  • Ongoing legal efforts, aim to recover lost funds, but many creditors face significant financial and psychological hardship. The recovery and legal process continue well beyond the platform’s collapse in early 2019.

The Partial Refund: What Creditors Received

Creditors receiving partial refund from QuadrigaCX

The saga of QuadrigaCX, once one of Canada’s largest cryptocurrency exchanges, took a dramatic turn when creditors received a glimmer of hope. A partial refund of 13% was distributed to the beleaguered investors as part of the asset recovery and distribution process.

This modest restitution was based on the investment values as of April 15th, 2019, with specific payout values assigned to BTC and ETH.

Out of the approximate 115,000 users with balances on the exchange, a total of 17,648 creditors with validated claims emerged from the ashes of QuadrigaCX’s liability.

Asset Liquidation and Distribution

In an attempt to recover assets and appease creditors, Jennifer Robertson, widow of QuadrigaCX founder Gerald Cotten, stepped forward. She entered into a settlement agreement with the company’s bankruptcy trustee, surrendering approximately $12 million in assets. This forfeiture included:

  • Cash

  • Investments

  • Vehicles

  • Real estate

  • Loans

This was a critical step in the initiative to return assets to the users affected by the exchange’s failure.

It was the trustee’s mandate to convert the surrendered assets into Canadian dollars for distribution to the affected creditors.

The Recovery Effort

With the exchange owing customers $215 million, the court-appointed monitor Ernst & Young embarked on a mission to recover and identify assets.

Their efforts bore fruit, with approximately $34 million recovered, mainly in cash assets. This recovery settlement was small compared to the total sum owed to customers.

The process aimed to minimize trustee and legal fees. This ensured that the maximum possible amount could go back to the creditors.

Creditor Payouts

The harsh reality of the situation dawned on creditors when they found out they would only receive 13% of their funds. The bankruptcy proceedings brought to light that 76,319 unsecured creditors claimed to be owed a collective $214.6 million. Customers were confronted with life-altering financial losses. Quadriga now owed them $70 million CAD in fiat and $180 million CAD in crypto.

Gerald Cotten’s Financial Misconduct

Gerald Cotten's financial misconduct and QuadrigaCX collapse

The plot thickened with the revelation of Gerald Cotten’s financial misconduct.

The CEO of Quadriga not only misappropriated client assets to cover his substantial trading losses on the platform, amounting to approximately $115 million, but he also fabricated fake currency and crypto asset balances in accounts under aliases.

Gerald Cotten and wife
The crypto king and CEO Gerald Cotten with his wife

These fictitious accounts were used to engage in trades with clients and to siphon funds to his personal accounts.

The lack of internal oversight and controls at Quadriga gave Cotten free rein to engage in these fraudulent activities for an extended period, misusing client assets with impunity.

Ultimately, Quadriga was operated by Cotten as nothing more than a pyramid scheme. Deposits from new clients were being used to cover withdrawals by others.

Omar Dhanani aka michael patryn
Omar Dhanani aka Michael Patryn, Quadriga co-founder and partner in crime

Personal Gain and Losses

Cotten’s misconduct also led to personal gain at the expense of the company and its users.

Around $24 million of client funds were misdirected to his personal accounts, with a small portion returned to Quadriga, while $2 million was used for living and travel expenses.

The losses he incurred on the Quadriga platform were monumental, and his risky trading behavior extended to external platforms, where he lost an additional $28 million of client assets.

Impact on the Exchange

The financial fallout from Cotten’s mismanagement left Canada’s largest cryptocurrency exchange, Quadriga, in dire straits.

An estimated operating loss of $1 million was attributed to the Nova Scotia-based exchange, with a significant portion of this loss due to poorly documented fees paid to payment processors, including the payment processor in question, and other operating expenses.

Despite generating an estimated revenue of $45 million over its lifetime, the exchange was plagued by exceeding known and estimated expenses, leading to a net operating loss.

Legal Aftermath and Ongoing Investigations

Ongoing investigations and legal aftermath of QuadrigaCX

The legal turmoil that ensued following Cotten’s mysterious death only added to the complexity of the case. Read more on the Canadian crypto exchange scandal here.

The discovery of QuadrigaCX’s financial shortfall, to the tune of $250 million CAD, prompted the appointment of Ernst & Young to oversee the search for the missing funds.

The legal efforts to locate the missing funds have been critical. Litigation has lead to the freezing of accounts and the seizing of assets tied to the fraud.

While the last official update to creditors was in 2020, the legal scrutiny into QuadrigaCX’s operations continue to this day.

Canadian Crypto exchange platforms have cooperated with law enforcement to aid in freezing or tracing funds related to the QuadrigaCX case.

Legal experts have also resorted to employing tools such as Norwich Pharmacal orders to navigate the challenges posed by the encrypted nature of blockchain transactions in their quest to recover the lost funds.

The establishment of the Crypto Fraud and Asset Recovery (CFAAR) network signifies a step forward in creating standardized best practices for resolving crypto disputes and asset recovery in legal circles.

Legal Actions Against Cotten’s Estate

Legal actions against Cotten’s estate have been numerous and substantial.

Jennifer Robertson, Cotten’s widow, filed an affidavit requesting a stay of proceedings to facilitate the search for accessible crypto assets and to negotiate bank drafts in an attempt to repay users.

Investigation Updates

Investigations into Cotten’s financial misconduct and the missing cryptocurrency continue, with the FBI and the Royal Canadian Mounted Police leading the charge. Despite the ongoing investigations, there have been no significant developments.

It was confirmed that Cotten:

  • Covered trading losses with clients’ deposits

  • Operated Quadriga like a Ponzi scheme

  • Incurred additional trading losses of $28 million on external crypto asset trading platforms without client authorization.

What happened to the wallets that Cotten owned?

The forensic investigation into QuadrigaCX shed light on the fate of the digital wallets Cotten supposedly managed.

Blockchain analysts have worked tirelessly to trace the flow of funds and identify wallet addresses involved in fraudulent activities.

However, the public ledger of blockchain, while recording all transactions, encrypts identities. This offers anonymity and poses technical challenges to asset recovery.

It was discovered that the cold wallets, where cryptocurrencies were believed to be stored offline, were empty. Cotten had transferred client funds to himself using different aliases, a revelation that left many shocked and dismayed.

Obstacles in Asset Recovery

The quest to recover assets from the QuadrigaCX debacle has been fraught with challenges. Some of the main challenges include:

  • Private cold wallet addresses are notoriously secure but nearly impossible to access without the owner, complicating the recovery process.

  • The international nature of cryptocurrency transactions introduces jurisdictional challenges, often placing them outside the reach of any single domestic court.

  • The legal classification of cryptocurrencies within traditional frameworks remains ambiguous, further hindering recovery efforts.

Customer Stories: The Human Cost

Impact of QuadrigaCX collapse on customers

The human cost of QuadrigaCX’s collapse is immeasurable.

Customers reported losing their life savings, with some losing upwards of $150,000.

One such investor watched in disbelief as their account, holding over $300,000 earmarked for retirement, vanished with the platform’s collapse.

Another heartbreaking case involved a customer who needed the funds for medical treatment but lost over $14,000. The psychological toll was immense, with many affected clients seeking mental health support to cope with the loss.

The financial losses and ensuing uncertainty inflicted significant stress on customers’ personal lives, leading to strained family relationships and personal hardships. In their quest for remuneration, customers have banded together in class action lawsuits, though the potential for full recovery remains a distant hope.

The collapse of exchanges such as Quadriga and FTX has made Canada one of the most regulated crypto environments. See

Life-Altering Losses

The collapse of QuadrigaCX dealt devastating blows to its customers. Many of them lost significant portions of their life savings or substantial earnings from previous investments. Eric Z., an early cryptocurrency investor, saw the majority of his profits vanish when $100,000 was lost on QuadrigaCX, wiping out the gains he had made from an initial investment of $5,000 in 2014.

Tong Zou, a 33-year-old software engineer, watched helplessly as his entire life savings, including a $200,000 parental gift, disappeared into the digital abyss, leaving him as the only person with nothing.

Tong Zou Quadriga Victim
Tong Zou

Seeking Justice

Amidst the financial wreckage, affected customers like Mr Zou have taken to the public stage to share their stories, hoping to promote justice for victims and to prevent similar cryptocurrency scams from recurring. Victims have sought legal avenues to recover their lost investments, bringing to light the struggles of individuals in their pursuit of compensation.

Jennifer Robertson, Cotten’s widow, maintained her unawareness of his fraudulent activities prior to Cotten’s death, and her role in seeking justice remains undetermined. Aaron Matthews, a close associate, also expressed similar concerns.


As we reach the end of this tumultuous journey through the QuadrigaCX debacle, one thing is clear: the world of cryptocurrency, while offering the allure of wealth and freedom, is not without its perils. The saga of lost millions, a CEO’s deceit, and the ongoing quest for justice serve as a stark reminder of the importance of due diligence and the need for robust regulatory frameworks in the crypto space. For the victims of QuadrigaCX, their fight continues, a somber testament to the human cost when digital currencies falter.

Frequently Asked Questions

How much money was owed to QuadrigaCX clients at the time of bankruptcy?

Clients of QuadrigaCX were owed $215 million at the time of bankruptcy.

What percentage of their investments did QuadrigaCX creditors receive back?

QuadrigaCX creditors received back only 13% of their investments, a relatively low percentage.

What was Gerald Cotten’s role in QuadrigaCX’s collapse?

Gerald Cotten, the CEO of QuadrigaCX, engaged in financial misconduct and misappropriated client funds, ultimately leading to the exchange’s collapse.

What challenges are there in recovering lost cryptocurrency assets?

Recovering lost cryptocurrency assets can be challenging due to secure but inaccessible private cold wallet addresses, jurisdictional issues, decentralized blockchain technology, and legal ambiguity around digital asset treatment in insolvency. Be cautious when dealing with these challenges.

What has been the human impact of QuadrigaCX’s collapse?

The collapse of QuadrigaCX has led to devastating financial losses for customers, resulting in significant psychological and familial challenges. Some affected customers are pursuing legal action to seek compensation for their hardships.

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Canada Crypto Exchange Scandal: the Story of QuadrigaCX

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This post summarizes the QuadrigaCX crypto exchange scandal in Canada and its dramatic fall. Read more.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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