The account with the highest activity, Markay, received fiat credits of CA$220 million and crypto deposits of 34,806 BTC and 540,011 ETH between 2016 and 2018—only 1% of which was supported by any documentation that the fiat or crypto actually existed, the report alleged. In June 2017, the account received a single deposit of CA$100 million, coinciding with a CA$14 million dollar loss that Quadriga attributed to a technical error.
Cotten then allegedly used the Markay account’s fake money to buy real funds from unsuspecting customers, sending a large portion of the proceeds to accounts that Cotten controlled at three other exchanges, as well as “wallet addresses where the beneficial owner of the wallet is currently unknown,” according to the report.
Between 2016 and 2019, Cotten transferred a total of 9,450 BTC, 387,738 ETH and 239,020 LTC out of QuadrigaCX cold wallets. (It is unclear here as to whether the funds were transferred out via the Markay account, or some other means.)
What did Cotten do with funds in his name? He used it to trade—poorly.