By CCN: The FBI officially expanded the QuadrigaCX case, in which the founder suspiciously died, and more than $100 million in cryptocurrency was lost, to the United States today. The agency took to Twitter to ask for US-based victims of the crime to come forward. They then provide a link to a questionnaire the victim can fill out, including details like how much you lost.
The ongoing trend of government intervention is either part of an evolution or a new pattern of anti-crypto activity, depending on how you see things.
Governments Getting Increasingly Involved in Blockchain Affairs
If you think crypto needs fewer rules and more services, you’re likely not to be happy with governments getting involved in settling failed exchanges.
If you think crypto needs rules, you’re likely happy to see the FBI and others having enough sway to do something.
The government isn’t always useless, after all. In one case they returned lost crypto to Bitfinex. And they certainly made people like Tim Draper rich when they let him buy up Ross Ulbricht’s collection of bitcoins. The massive trove will likely make Draper a billionaire in crypto alone before it’s all said and through.
The QuadrigaCX case is particularly interesting because there are so many strange elements to it. In one instance, the exchange reports the death of its CEO a month after the fact. It then makes it plain that it’s functionally insolvent, and blames this on a lack of access to wallets held by the deceased. As if this scenario wasn’t crazy enough, it looks like funds were later sent to the addresses in question.
QuadrigaCX: Questions Linger
Investigators have concluded that it’s unlikely the exchange had most of what it said it did. Some were dismayed when Jennifer Robertson, wife of Gerald Cotten, asked for money from the funds being liquidated to pay creditors.
Now it appears the case may go well beyond a procedural bankruptcy court in Canada. The exchange may be under criminal investigation for services rendered to US citizens.
As a result, whoever’s left of the executive staff may not be entirely off the hook. In many regards, US government agencies are looking to enforce cryptocurrency regulations and laws to the fullest extent. Making an example of companies that had some backdoor dealings and other problems is certainly not beyond the scope of our Justice Department.
In cases like this, it’s often a question of whether or not the government can recoup anything anyway. The exchange has to have assets to have any value, and to date, no significant assets have emerged.
The problem for QuadrigaCX lies in the way it structured its business decisions and relationships. The exchange previously went through a massive struggle when a Canadian bank froze its assets.