Four years ago, QuadrigaCX founder Gerald Cotten grinned as he helped two preschoolers try out Canada’s first bitcoin ATM in Vancouver.
A toddler fed a $100 bill into the machine, converting it to bitcoin with the touch of a button.
“Done, now your wallet is funded,” said Cotten, in a video shot by the two girls’ dad at the Vancouver office of cryptocurrency exchange Quadriga, which allowed clients to buy cryptocurrencies. The office has since closed.
Watching the boy-faced Ontario business school graduate back then it’s difficult to imagine Cotten’s death at the age of 30 would touch off a storm of controversy in the cryptocurrency world. Friends and business associates this week described him as a kind, affable man who wasn’t flashy but enjoyed fine things.
Gerry was passionate about the digital currency space for as long as the space has existed. It’s extremely unfortunate. I hope we are able to retrieve the cold storage coins and fix what’s happened to his reputation.– Michael Patryn , ex-business partner
Cotten’s will filed in court Dec. 21, 2018, outlines how his $9.6-million cryptocurrency fortune will be divvied up between his Canadian loved ones — including a pair of chihuahuas with a trust fund.
All this as people who used his cryptocurrency exchange demand answers about what will happen to the millions of dollars worth of cryptocurrency they had entrusted to Quadriga that the company now says can’t be accessed because Cotten allegedly was the only person with the recovery codes needed to withdraw the currency held in secure “cold wallets.”
Investor Elvis Cavalic is one of the QuadrigaCX customers who now says he can’t access his cryptocurrency. Cavalic told CBC’s As It Happens earlier this week that he had roughly $15,000 worth of bitcoin stored with the exchange.
“With a cold storage wallet, it’s completely offline,” he said. “It’s not connected to the servers or the infrastructure set up by the exchange. It’s usually a physical device that you would plug into a computer and requires a button to be pressed and it might need a password.
“So, the cold storage keys or the password or the access or the existence of it or the location of it, for whatever reason, was not left behind with the [executor of his] estate — his wife.”
Millions of dollars stored on encrypted thumb drives
In January, Cotten’s widow, Jennifer Robertson, posted a notice on the five-year-old company’s website saying the founder — Cotten — had died suddenly.
In a court affidavit, Robertson said Cotten died Dec. 9 while working in Jaipur, India, helping open an orphanage.
WATCH: Gerald Cotten helps 2 children use Canada’s first bitcoin ATM in Vancouver
This week, more details emerged about how he was admitted to hospital with a bowel perforation and signs of septic shock, only to go into cardiac arrest, according to the Times of India.
In court documents, Robertson described hiring security experts to try to pry open digital cold storage accounts where client assets worth between $190 and $250 million are stored on encrypted thumb drives and on the laptop Cotten alone used to run the business.
‘He was a gem’
Business associates can’t believe Cotten’s story ended like this.
“He was a very kind person. He wasn’t showy or flashy. But he did like fine things. He was a gentleman,” said Vancouver business associate and friend, Frederick Heartline.
Considering the amount of dirtbags in crypto especially, he was a gem.– Frederick Heartline , Vancouver business associate and friend
“Considering the amount of dirtbags in crypto especially, he was a gem.”
Back in 2015 Heartline ran virtual currency meeting spots or hacker dens.
He said Cotten was a key player in Vancouver’s vibrant bitcoin community.
‘A ray of sunshine’
In 2013, Cotten launched Vancouver-registered Quadriga just three years after graduation from York University’s Schulich School of Business.
Michael Patryn said he funded the venture and was a Quadriga adviser until 2016.
Patryn — who said he was speaking from Thailand and heading to Hong Kong — said at first he didn’t believe word of Cotten’s death.
“He was like a ray of sunshine,” said Patryn, who first met Cotten online over five years ago. “The guy just always had a big goofy smile and laugh. He used to crack jokes all the time. He used to say he didn’t open up to many people, but he was able to open up to me, and he was like a little brother to me.”
He said they eventually moved to Vancouver and created Quadriga.
They worked together until a fight split them in 2016, said Patryn.
Associates say the pair were an odd match.
They describe Patryn as a “mysterious” and dynamic character, and a tougher business mind.
Some have also suggested that Patryn isn’t his real name.
Patryn told CBC he’s aware of the social media posts suggesting he’s actually Omar Dhanani, who pleaded guilty to conspiracy to commit fraud in 2005 in a New Jersey court.
Patryn says any suggestion that he’s actually Dhanani is wrong.
He believes the confusion relates to an alias Dhanani used — Omar Patryn — and it’s just a coincidence.
CBC inquired with U.S. prosecutors and Canadian police to verify whether the two men are the same, but all authorities declined comment.
Patryn says he had lost touch with Cotten but felt compelled to reach out to Cotten’s widow, who he and others said is “spooked by death threats” from angry clients who are short cash.
“Gerry was passionate about the digital currency space for as long as the space has existed. It’s extremely unfortunate. I hope we are able to retrieve the cold storage coins and fix what’s happened to his reputation,” said Patryn.
Signs of trouble
Quadriga’s troubles began before Cotten died.
Customers complained of transaction delays for months.
Then CIBC froze $26 million over concerns about “disputed ownership.”
On Tuesday, the company moved to get creditor protection, and it was granted 30 days to sort out financial matters by a judge in Nova Scotia. Cotten and his wife had a home outside Halifax, according to the will.
Trust fund chihuahaus
Meanwhile, those who knew Cotten describe an affable kind man who liked to fly helicopters.
Alex Salkeld said Quadriga often hosted “nerds” at bitcoin meetups.
He says Cotten was always joking, and it’s fitting he died helping orphans, given his easy way with children, seen in the video Salkeld shot with his two daughters testing the bitcoin ATM.
Cotten’s will names his widow as the sole beneficiary but in case of her death, $9.6-million in properties and possessions would be divided among other family members. His pet chihuahuas — Nitro and Gully — would get a $100,000 trust fund for lifelong care.
His plane and 2017 Lexus — and a Kelowna, B.C., property — were bequeathed to his brother and his sister-in-law.
Various N.S. properties and his sailboat were given to his parents.
‘Bit of a risk taker’
Heartline refused to lose faith in Cotten, recalling drinking nights sharing vodka coolers and stories about Cotten exploring tunnels under York University as a student.
“He was a bit of a risk taker,” Heartline said.
“There’s a lot of bullshit going around right now people saying [Cotten] faked his death — he died with the keys,” he said.
But Heartline has faith. He said Cotten will send a password posthumously.
He believes Cotten had a plan.