QuadrigaCX Collapse: What Happened and Why It Still Matters

When QuadrigaCX, Canada’s largest cryptocurrency exchange at the time, which collapsed in 2019 after its founder died with no access to cold wallet keys went offline, over 115,000 users lost access to $190 million in crypto. No one knew where the money was. Not the customers. Not the regulators. Not even the company’s own employees. The founder, Gerry Cotten, had been the sole keeper of the private keys—and when he died unexpectedly in India, those keys vanished with him. This wasn’t a hack. It wasn’t a bank run. It was pure, unadulterated negligence wrapped in a veneer of legitimacy.

What made the QuadrigaCX collapse, a catastrophic failure of internal controls and transparency in a major crypto exchange so damaging wasn’t just the money lost. It was the trust shattered. Users thought they were trading on a regulated, secure platform. In reality, QuadrigaCX had no audited financials, no cold storage documentation, and no clear separation between company funds and customer assets. Even worse, the company had been quietly moving user funds into personal accounts for years. The crypto exchange failure, a systemic breakdown in custody practices that left users with zero recourse became a textbook case of what happens when decentralization rhetoric meets centralized control.

The fallout was brutal. Investors lost life savings. Some filed lawsuits. Others gave up on crypto entirely. Regulators in Canada scrambled to respond, eventually launching a probe that led to criminal charges against former executives. The crypto exchange security, the standards for safeguarding customer funds that became stricter after QuadrigaCX standards didn’t just improve—they became mandatory in many jurisdictions. Exchanges now have to prove they hold customer assets, disclose custody methods, and often carry insurance. But even today, many smaller platforms still operate like QuadrigaCX did: opaque, unregulated, and dangerously reliant on one person.

What you’ll find in this collection aren’t just articles about scams or bad exchanges. These are real stories about what happens when trust replaces verification. You’ll read about platforms that vanished overnight, tokens with zero liquidity, and exchanges that hid behind fake audits. Each one carries the same warning sign: if you can’t see how your money is stored, you don’t own it. The QuadrigaCX collapse didn’t just kill a company. It killed the illusion that crypto could be safe without transparency. And that lesson? Still applies today.