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Former QuadrigaCX Regulatory Attorney Blames Deceased CEO for the Exchange’s Downfall

Former QuadrigaCX Regulatory Attorney Blames Deceased CEO for the Exchange’s Downfall

In a new twist to the controversial QuadrigaCX fiasco, the now-defunct cryptocurrency exchange’s former regulatory attorney Christine Duhaime says that the late CEO Gerald Cotten’s decision to rid the firm of “law and order folks” is what led to its dramatic decline, reports Bloomberg, March 27, 2019.

Late CEO’s Desires

The story surrounding the fallen Canadian cryptocurrency exchange QuadrigaCX continues to surprise people with its labyrinthine twists and turns.

The troubled exchange owes close to $194 million to about 115,000 customers after its CEO Gerald Cotten, who was the only person having access to cold storage wallets comprising of $250 million worth of digital currencies, passed away in December 2018 in India.

Now, attorney Duhaime, who played an important role in getting Vancouver-based QuadrigaCX regulatory approvals to run as an exchange, has gone on record to state that the platform’s downfall began one day in 2016 when Cotten decided he no longer desired to run it as a listed company.

In a March 26, 2019, post for online crypto publication Coindesk, Duhaime wrote:

“On that day, he terminated the professionals that were, in his mind, ‘law and order’ folks — the accountant, the auditor and me, the regulatory attorney,”

Adding,

“From that moment onwards, Mr. Cotten solely took over QuadrigaCX and operated the exchange as if it had no investors, no shareholders, no regulatory agencies and no law that applied to it – no corporate law, no securities law, no anti-money-laundering law and no contract law.”

Duhaime’s Law Firm Owed $75,000

Per the Bloomberg report, Duhaime was hired in 2016 to help the exchange’s securities lawyer draft a statutory prospectus. After six months, her firm was let go by Cotten.

Duhaime states that recently her law firm faced attempted extortion when a person demanded that they provide privileged and confidential details pertaining to QuadrigaCX or face defamation on social media. The person also threatened to file a false criminal report against the law firm to law enforcement agencies.

She added that as a result of such threats, people who actually have relevant information and papers that could help speed up the QuadrigaCX investigation are now hesitant to come forward.

Notably, Duhaime’s law firm is owed close to $75,000 by QuadrigaCX.

As reported by BTCManager on March 22, 2019, QuadrigaCX’s legal representative have formed a creditors committee to aid them in representing the interests of the 115,000 customers who were adversely impacted with the unfortunate death of Cotten.

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Published at Fri, 29 Mar 2019 18:00:30 +0000

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AlphaBay Shut Down by Law Enforcement, Admin Commits Suicide in Jail

AlphaBay Shut Down by Law Enforcement, Admin Commits Suicide in Jail

AlphaBay, the most popular marketplace on the dark web, shut down on July 4. At first, many of the users suspected an exit scam; however, it has since become clear that law enforcement has taken down the underground market. According to the Wall Street Journal, an international police action took place in the United States, Thailand and Canada.

On July 5, law enforcement in Thailand arrested Alexandre Cazes, 26, a Canadian citizen who is believed to be one of the operators of AlphaBay. On the same day, the Royal Canadian Mounted Police (RCMP) executed a search warrant at a residence in Trois-Rivières, Quebec, where a high-technology crime unit seized computer equipment.

Melissa Sweeney, a spokeswoman for the U.S. Embassy in Bangkok, stated Cazes was taken into custody by Thai authorities “with a view toward extradition to face federal criminal charges in the United States.” According to the Wall Street Journal, it wasn’t immediately clear whether the defendant had legal representation.

On Wednesday, Cazes was found hanged in his prison cell at the Narcotics Suppression Bureau in Bangkok, Thailand. The death of the alleged AlphaBay operator was confirmed by a spokeswoman for Canada’s foreign affairs department on Thursday. However, she declined to comment further on the case due to privacy reasons.

According to the Bangkok Post, the body of Cazes was found by a duty officer who noticed a towel hanging from the toilet door in his cell. When the officer entered the cell, where the suspect was held alone, he found Cazes dead. Authorities believe the suspect used the towel to hang himself.

Cazes had been living in Thailand with his wife for eight years, working as a computer programmer. The Criminal Court in Thailand issued a warrant for the suspect’s arrest on June 30 at the request of U.S. law enforcement authorities. According to the Bangkok Post, during the arrest on July 5 in the Thawi Watthana district of Bangkok, investigators seized four Lamborghini cars and three houses worth approximately 400 million baht in total (nearly $12 million).

AlphaBay was founded in December 2014, taking the place of the Silk Road Marketplace, which was seized by the FBI in October 2013. Andrei Barysevich, a director at the threat intelligence company Recorded Future Inc., told the Wall Street Journal that AlphaBay not only focused on the sale of drugs, but also allowed the advertising of products and services that other underground markets banned, such as stolen credit card numbers and online fraud tutorials. The researcher stated that AlphaBay sold more than $5 million worth of stolen credit card information in the first half of 2017 alone.

Nicolas Christin, an associate research professor at Carnegie Mellon University studying underground marketplaces, said the total sales on AlphaBay had an average of $600,000 to $800,000 a day. That means the marketplace earned millions of dollars in commissions every year.

Some users on the /r/DarkNetMarkets subreddit blamed the vulnerabilities of AlphaBay for the shutdown of the website.

“An AB vulnerability leading to an IP leak or other de-anonymization issue would not be a surprise — how many bugs were there over the years reported here [in the subreddit]? Seemed like PMs were leaked every couple months … And for every bug you see, there’s a dozen you don’t. I started being surprised a long time ago that AB was still around outliving so many apparently better-run DNMs, having neither exit-scammed nor been hacked nor been raided. Perhaps its time was simply up,” Gwern, an independent researcher, wrote.

The post AlphaBay Shut Down by Law Enforcement, Admin Commits Suicide in Jail appeared first on Bitcoin Magazine.