THE RETURN OF THE (Crypto)KING

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When this story escapes the confines of Medium, it will be on the front page of every major media outlet in the world. It seems as though Gerald William Cotten — Quadriga CEO, alleged post-mortem Ponzi perpetrator, and the subject of a popular Netflix documentary called Trust No One: The Hunt for the CryptoKing — is not dead as reported on his 2018 death certificate. It seems, in fact, that he is very much alive.

And he’s returned to the blockchain. But this time, it’s not QuadrigaCX. It’s SceptreXC. How do we know? First, let’s start with a brief background on Gerald William Cotten and Quadriga, for those not familiar.

Gerald William Cotten, circa 2016 (Photo courtesy of Netflix, Inc)

The Backstory

QuadrigaCX was a cryptocurrency exchange founded in 2016 by Gerald William Cotten. By 2018, when Cotten came under investigation for Ponzi-esque business movements, Quadriga had become Canada’s largest exchange. As the investigation ramped up, Jennifer Robertson — Cotten’s wife — announced that Cotton had died while performing charity work in Jaipur, India. Later, she revealed to investigators that nearly all of Quadriga’s cryptocurrency was protected by a password that only Cotten knew, and that he’d taken that password to the grave. With no way to pay expenses, Quadriga was put into maintenance mode and sought creditor protection. In June 2020, the Ontario Securities Commission officially concluded that QuadrigaCX was indeed a fraud and a Ponzi scheme.

Several factors, including that the mispelling of his name on his 2018 India government-issued death certificate have led to widespread speculation that Cotten exit scammed, and then faked his own death. (Photo courtesy of the Press Information Bureau of India)

His wife denied all knowledge of the exchange’s fraudulent activities, and the $163,000,000 has never been recovered or even located on the blockchain. Many have called for his body to be exhumed, but it has yet to happen.

Now, four years after his death, moves made on the Ethereum blockchain suggest that Gerald Cotten has returned to cryptocurrency, possibly to retrieve the 9 figure sum that he embezzled from Quadriga investors.

But what would he do with all of that money? Where would it go?

Gerald William Cotten (right) with his wife Jennifer Robertson, circa 2018. (Photo courtesy of Cassie Williams, CBC News)

The Evidence

Two days ago, a contract named “SceptreXC” (0x2b8bec81f648f327b7d8278ee74932845cda3d19) was deployed on the Ethereum network. Although I am a blockchain investigator and cryptocurrency day trader, at first I did not observe any red flags. Then, as I traced the whopping 46,000 transactions of the wallet which funded the SceptreXC deployer, I noticed that many of the original incoming deposits dated all the way back to 2017, and were originally from… QuadrigaCX. From there, I discovered several clues as to the identity of the deployer.

1. The name, SceptreXC, is obviously very similar to QuadrigaCX. But more than that, Sceptre was Cotton’s online handle, and was the name he used when he met his business partner Michael Patryn.

2. After some digging, I was able to find SceptreXC’s website (https://sceptrexc.com/). However, it’s just a command line prompt. Notice, though, that the time is set to India time. Cotten supposedly died in Jaipur, India. Is it possible he’s still there?

At time of writing, I have not been able to progress past the command line.

3. The ticker for SceptreXC is $RIPGWC, a clear reference to the fact that Gerry William Cotten (GWC) is supposed to be dead.

The ticker for SceptreXC is $RIPGWC, or “R.I.P. Gerry William Cotten”

4. SceptreXC has a total supply of 163,000,000, which is the same figure often reported as having been stolen by Cotten.

5. Three percent of the LP tokens minted on pair creation have been sent to Quadriga exchange addresses. 1% to Quadriga1, 1% to Quadriga2, and 1% to Quadriga3.

6. Perhaps most interesting is that the owner has called functions within the contract that exclude all 3 Quadriga exchange addresses from a limit on transaction size and having to pay taxes.

At present, I am taking a multifaceted approach to getting to the bottom of this case. Because Cotten’s wallets were never found, I have resigned myself to searching through the 46,000 transactions for signs of the $163,000,000. So far, I have not been successful, although I have found a number of bizarre connections with other high profile deployers and wallets — including the wallet of Vitalik, himself. I’ll write a separate article for that.

The Conclusion

It’s hard to deny the authenticity of these connections. But why launch a token? The most obvious answer to that is for money laundering. It’s a way to get money from point A to point B without drawing attention or leaving a long paper trail.

In case you want to see the fireworks, I’ll include the contract address, which you can use to plug into DexTools or your favorite charting website. It will be interesting to see if SceptreXC exhibits the same volatility pattern as something like Wonderland, the high-profile OHM fork linked to Quadriga co-founder, Michael Patryn.

SceptreXC Official Contract Address:
0x2b8bec81f648f327b7d8278ee74932845cda3d19

BEWARE! This is a highly volatile investment. I recommend abstaining from buying unless you are a highly experienced trader, and even then I’m not saying you should buy…

Make sure to subscribe to this account for more information and updates as I take a deep dive into the Ethereum blockchain to understand more about this bizarre situation.

Update: The community has come together and created a Telegram: https://t.me/sceptrexc

Oscar Gutierrez is an experienced trader and blockchain tracker currently attending a prestigious school for journalism in the American Southwest. None of the content in this article should be taken as financial advice. If you would like to contact Oscar, he can be reached at [email protected] or on Telegram at @OGutierrez1896