Uncover - S12: "A Death in Cryptoland" E2: Hunting Ghosts

Episode Date: December 12, 2021

QuadrigaCX collapses and there’s widespread panic. An online sleuth searches for answers through a tangle of websites, hidden identities and a trail of emails. He uncovers a pattern of deception tha...t predates his exchange, linking Gerry to a shadowy underworld of fraudsters. For transcripts of this series, please visit: https://www.cbc.ca/radio/podcastnews/a-death-in-cryptoland-transcripts-listen-1.6035764

Transcript
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Starting point is 00:00:00 Hey, are you getting tired of asking your friends for their podcast recommendations? Well, they're probably getting tired of it. I'm Damon Fairless from CBC's daily news podcast front burner. I want to tell you about Sounds Good, CBC's podcast newsletter. It's got the latest podcast recommendations and behind the scenes footage. Subscribe to the bi-weekly newsletter at the link in our series description so you can keep your friends. We listen to everything so you don't have to.
Starting point is 00:00:25 This is a CBC Podcast. On January 14th, 2019, Quadriga CX finally told the public that its CEO, Gerald Cotton, was dead. Even before that, customers were already jittery. For almost a year, the company has been struggling to pay out their clients.
Starting point is 00:00:46 The value of Bitcoin has plummeted, and there's been a mad rush to get money off the exchange. When they start having withdrawal delays, that's when you start worrying, and that's when you get your money out. They couldn't get cash. They couldn't get crypto off the exchange. It was all falling apart.
Starting point is 00:01:10 And for a whole month, the company appeared to operate as though its CEO weren't gone. Because like when the news came out, the exchange was still running and they made a statement that like everything's fine. We're not on fire. They waited a very long time, obviously, to announce his passing. So I think that's the first kind of shock to the system is that inconsistency between what they'd been saying and what had clearly happened. I mean, why wait that long? That's extraordinary. If that was extraordinary,
Starting point is 00:01:39 the next revelation was shocking. About two weeks later, it's revealed in court that the company can't access customers' money. Jerry was the only person with the passcodes to more than one quarter of a billion dollars. You know, I was holding out hope probably until then, like a lot more. And then it was just like, oh, yeah, it was not good. It was not good for anyone that day. You know, I wasn't really buying the headline, crypto CEO dies with keys to the wallet. The exchanges just don't operate that way or shouldn't operate that way. Here's the thing. A cryptocurrency exchange typically has two types of digital storage.
Starting point is 00:02:22 One is called hot wallets, the other, cold wallets. Hot means the crypto is stored online, while cold, entirely offline for security. And you need passwords to get at it, or keys. So to learn Gerald Cotton was the only person holding those keys, and now he's dead, well, it all defied logic. Really? Are you sure, guys? That just seems off, you know? and now he's dead. Well, it all defied logic.
Starting point is 00:02:47 Really? Are you sure, guys? That just seems off, you know? Here's a guy named Elvis from Alberta in an interview with the CBC. He had thousands of dollars on the exchange. So the cold storage keys or the password, for whatever reason, was not left behind with the executive estate, his wife, which to a lot of people is strange because two weeks before his death, he had left a will, leaving a plane and two houses and $100,000 for the care of his two chihuahuas. For two chihuahuas, he left how much?
Starting point is 00:03:22 $100,000. The other thing people found alarming was the timing of that will. It was drawn up just days before his trip to India. Then a week after this news that no one can open the cold wallets, Quadriga's website goes down. A week after that, the company files for creditor protection. Now people are really freaking out. I smelled a rat. I mean, you know, I think many, many people did.
Starting point is 00:03:58 I'm Takara Small, and this is A Death in Cryptoland. Chapter 2 Hunting Ghosts I felt all the blood rush out of my face, out of my body, because this was Jerry. I knew Jerry. This is Michael Perklin, not to be confused with Quadriga's co-founder, Michael Patron. Not only did he have money on the exchange, he knew Jerry personally. They used to play board games together. Board games, like Ticket to Ride, which was one of his favorite board games about
Starting point is 00:04:46 trains. They'd gotten to know each other in Toronto in the months after Quadriga had formed. We'd go out frequently for lunches, where Jerry would order his bunless hamburgers, and oftentimes we'd go out for a pint after work. Jerry would have cider, though, on account of his Crohn's disease. He told people about his condition that he'd been diagnosed in the year before starting Quadriga.
Starting point is 00:05:11 The two shared an interest in cryptocurrencies. Michael works for an exchange out of Denver now, and that's where he was when he learned about Jerry. We were waiting for the conference room to free up, and while I was outside of the conference room, I was scrolling through my phone looking at news. And that's where I found out. So I reached out to other people that I knew in the cryptocurrency space in Toronto saying, hey, did you hear about this?
Starting point is 00:05:33 Yes, I just heard about this a day ago. I'm crushed. And it was a somber day. And I remember it threw me off for that meeting because I couldn't believe that Jerry was dead. But at the same time, something didn't quite sit right. Jerry was a very careful speaker, but he was also just a careful person in general. The way that he would talk about things, the way that he would think about things, he was always thinking about the risks and always planning for the future. It seemed very inconsistent to me to learn that the only copy of his entire organization's funds were left on a single solitary encrypted laptop.
Starting point is 00:06:26 We asked Andrew Wagner about his reaction. He's the ideologue, the guy with the Bitcoin tattoo. He spent time with both Jerry and his business partner when they launched the company in Vancouver. He didn't hesitate. Betrayal. Who dies with the keys? Or is your dead man's switch? You're supposed to have a dead man's switch, if you know the term. In a nutshell, it's a backup plan. If someone dies, there's an automated response. In other words, people were expecting the passwords or keys to be shared with someone in the company.
Starting point is 00:07:02 But it soon became painfully evident that wasn't going to happen. Andrew figured it meant one of two things. It's either stupidity or greed. Andrew didn't lose money, just his faith. His mother is down about 5,000 bucks, but there are some who are out massive amounts. Thousands, hundreds of thousands, even millions of dollars. Alex Sakhild sums up what was happening on the online forum Reddit.
Starting point is 00:07:33 It's chaotic, right? Because everyone wants answers and they're just not getting them because they don't exist. I don't want to be that guy, but is there an obituary or something to verify Gerald Cotton's death? The way you guys have been operating this past year has brought us to this new low, to question whether someone has passed or not. There's something grimly amusing about accepting fake internet money,
Starting point is 00:07:58 but demanding real physical bodies in case of death. LOL, give me the death certificate. There are accusations, demands for evidence, people fighting over what to believe. At one point, someone claiming to be a relative dresses down the crowd, calling the posts disgusting and referring to one guy as an insensitive jerk. The family is living a nightmare, they say. Others seemed confused, not knowing what to make of it all. This is either a totally soulless, borderline, sociopathic reaction to a man's death and a family's grief, or a completely rational reaction
Starting point is 00:08:37 to an industry riven with fraud and corruption. I don't know for sure which one. A few Redditors were sympathetic. I can only imagine it would be a terribly painful way to go. My condolences to the family. Rest in peace. There was also at least one tribute. It read, And the person praised the company, saying, Quadriga has always paid out
Starting point is 00:09:07 through thick and thin. And they ended the post by calling Jerry a rare, honest type who had died fighting for Bitcoin. But then the horror stories start to emerge. Some of you may have heard
Starting point is 00:09:24 on the news or read an article, something about me. This guy, Tong Zhou, lost half a million Canadian dollars in one transaction. He spilled a story on YouTube. Yeah, I pretty much ended up losing my life savings because of it. And it's really kind of a crazy story how it happened. Tong had made a bunch of money off the sale of his apartment in San Francisco and was trying to move it back to Canada, where he's from. He thought he could avoid losing money to the bank on currency conversion and fees. He figures about 10 grand.
Starting point is 00:10:02 The plan was to convert the cash to crypto and back again. Easy. Or disastrous. While Tong had used other exchanges, he says this was the first time he had ever used quadrigas. His timing was awful. It was weeks before Jerry's fateful trip to India. weeks before Jerry's fateful trip to India. And that's just one story. About 76,000 people lost more than $250 million. Freelance journalist Amy Castor became, in her words, obsessed with the story.
Starting point is 00:10:44 Well, obsessed means that you can't sleep unless you find the answer to one more thing. You know, it just means you just kind of go on and on and on to the point of exhaustion. And I think when I put together the Quadriga timeline, that's sort of what I did is I just kept, I literally thought, well, I'll just whip this out in a day. But it just went on for like days and days and a week to the point where, you know, I just would be in my pajamas all day and all night. And that's all that I did. And it really kind of made me sick, frankly. There was one point where I was like walking my dogs out at night and I looked down and I still had my pajamas on. I'm like, what am I doing?
Starting point is 00:11:19 In the coming months, as the company hurdles its way towards bankruptcy, a number of irate customers start to hunt for clues. They're trying to figure out what really happened at Quadriga CX. So some people start doing their own investigations because you understand that the cryptocurrency world doesn't trust, doesn't trust, you know, the governments to begin with, right? And the exchange is shuttered. And a lot of people lost a lot of funds and they feel screwed, you know, and rightly so. They're angry. They're really angry. They're also searching the blockchain for answers. That's the public ledger that shows the movement of funds in and out of the exchange. Industry analysts couldn't find the cold wallets, the offline storage.
Starting point is 00:12:13 It suggests that it didn't have the reserves, the currency reserves, that it should have. The exchange is trading while insolvent or it's operating as a fractional reserve. It only has a fraction of the funds that it claims to have. Customers who lost money begin to organize, gathering on the encrypted messaging service telegram, swapping theories, articles, and documents. They're wondering if this is the tragic blunder of a young CEO or an elaborate con by a fraud artist. The head of a big exchange based in San Francisco offered up a $100,000 reward for the best lead that would solve the mystery of the missing money. They all want to know, where's the money, Jerry?
Starting point is 00:13:02 It's a question that one online sleuth in particular would become determined to answer. A man motivated by the loss of his money. A sum north of six figures. I lay down on the floor and just kind of stared at the ceiling for about an hour, just trying to come to grips with the fact that, yes, I think this money is gone. It was the first kick in the guts of many. He goes by the handle QCXINT. It stands for Quadriga Intelligence.
Starting point is 00:13:33 You know, I was shocked to hear that he was actually dead. That's pretty rare for someone his age, you know, a relatively young guy to suddenly kind of drop dead. So the inconsistency between what they were saying and what you could observe on the blockchain. So I think, you know, I started looking. A few other people started looking. We've agreed to keep his identity hidden.
Starting point is 00:13:56 It's taken months to persuade him to tell us his story. He's nervous of what could happen if people knew who he was. There could be repercussions. After all, he's been chasing phantoms online and back in time. And there are people who won't like what he's been up to. Or what he's uncovered. QCX INT. I can't really tell you too much about him other than what's online.
Starting point is 00:14:22 But what this individual did was he was available on social media and for example, put together. So over the years, Cotton and Michael Patron were online for a long time and they leave this trail of breadcrumbs online, you know, different websites they've set up, different email addresses they've used, different investigations that have taken place. We can take that and we can link it to other places on the web. So he did that. And he put together, for example, this huge document, and he put it up on Reddit, and basically saying, if anybody else has any clues, you know, contact me. basically saying, if anybody else has any clues, you know, contact me.
Starting point is 00:15:12 You see, if it weren't for QCXint, this story may have been quite different. Without him, a web of hidden paths and shady ventures might have stayed buried. Instead, he has built a massive dossier, sharing it with law enforcement and journalists like us, and Amy Castor. Amazed by what he'd found, she also began looking more deeply into Jerry Cotton's past. I'm watching videos on YouTube. If your ceramic stove is like mine, it's probably always getting covered in little burn marks that make it look ugly. I'm watching videos on YouTube on a channel called Jerry Rules with a Z. They're mostly from 2011 to 2012, a year or so before he launched Quadriga. You know, there's a whole bunch of videos of Jerry in there. And they were quite remarkable.
Starting point is 00:16:18 I think until you see him on video, you know, in kind of his private life, you don't really realize just how childlike he was and kind of goofy and immature. On a video call, QCXN distressed casually in a black baseball cap and a dark vest. He began his hunt for answers in early 2019, trying to learn who exactly Jerry Cotton was and what Kudriga had all been about. It began simply. Yeah, Jerry had a YouTube account that no one had found. Welcome to the first annual PokéBattle at Jerry's Stadium. Welcome to the first annual Poké Battle at Jerry's Stadium. There's videos of him kind of burning Pokémon cards and kind of laughing, you know, maniacally and, you know, chasing remote control helicopters around an oval and playing some very kind of goofy, nerdy jokes and things like this.
Starting point is 00:17:01 This bottle of hair mousse claims that it's flammable, but I'm a bit of a skeptic. So today I'm going to try and see if I can light the hair mousse on fire. It doesn't catch. Setting fire to stuff seems to be a running theme. There's a video where he lights up a Winnie the Pooh keychain, a stuffed duck, even a walnut. This video confirms that a walnut can indeed be lit on fire. The one that did struck me, though, was him burning money in a microwave.
Starting point is 00:17:32 I think that's my favorite. And, you know, that was certainly an omen of things to come. In another test of Canada's new plastic money, I'm going to see what happens when I put it in the microwave. It's a crisp new $20 bill. You can see Jerry in the reflection of the glass, filming as the bill rotates inside. He pulls it out for closer inspection.
Starting point is 00:18:06 I should take it out a bit early. Uh-oh. All of the holograms have actually melted. Incredibly hot. Look, you know, we've all kind of probably, you know, played around with matches when we were kids and, you know, lit something on fire and just watch what happens, you know, when something burns.
Starting point is 00:18:28 But for a grown man to be doing that and reacting in such a way is a bit disturbing in itself. There's definitely some pathology going on there, some psychological issues, and it made me extremely uneasy just the thought that this guy had been in charge of several hundred million dollars and that myself and and other quadriga customers or creditors had trusted him with our funds and And to be honest, the thought made me sick. It also made him more determined to find the truth. I thrive on detail. I thrive on data.
Starting point is 00:19:13 I mean, you know, I'm in the tech space. That's part of my world, part of my job. He's been chasing Jerry's ghost through a murky online labyrinth, hunting for paths through a tangle of websites, hidden identities and a trail of websites, hidden identities, and a trail of emails. But look, when I did start digging, I just uncovered this trail of data points, starting with things like the domain names. Really simple. What kind of intelligence can we glean from just the domain names that were used for Quadriga and Quadriga Financial Services,
Starting point is 00:19:43 for example, which is their holding group. And each of those will yield up a name, an address, an email, a phone number, and those can be revealing. And so you can successfully build up essentially like a map. Easiest way to think of it is like a map of interconnected points, linking all these domain names to a single entity or entities. You know, I was absolutely committed to doing a comprehensive report in a form that could be provided to law enforcement
Starting point is 00:20:12 and investigators that was based on evidence, not hearsay, not conspiracy theories, but it was based on evidence. Jerry Cotton grew up in a small city called Belleville, Ontario. It's about a two-hour drive from Toronto. About 68,000 people live there. It's a pretty area, set on the shores of the Bay of Quinte. There's not a lot to do there, I know. I lived in a neighboring town. His parents, Cheryl and Bruce, ran a small business, Quinte Antiques. QCX Int wonders whether that's where Jerry got his knack for buying low and selling high. It's kind of funny though. While his mom and dad were selling goods from the past, Jerry was fascinated by the currencies of the future.
Starting point is 00:21:09 Well, he was just always leaps and bounds beyond most of the computer teachers we had at that time. And he certainly loved computers and technology. So my name is Scott Giroux. I live here in Belleville, Ontario. I went to high school with Jerry, Bayside Secondary School, and we started there in 2002. Scott Giroux thought Jerry seemed very bright. He seemed to read a lot. And I was always amazed by his knowledge as a grade nine, as a 14 year old of kind of markets and trading. And I remember sometimes he would talk about, you know, being
Starting point is 00:21:52 up all night, maybe trading on like Asian markets and stuff like that. And, you know, and I remember him saying that he was up a little bit. I think, you know, we're talking in the maybe hundreds or maybe small thousands of dollars kind of thing. Jerry would get around firewalls at school so that he can make trades and play computer games. One person we spoke with, but wouldn't talk to us on tape, remembers being on the school bus with Jerry and seeing him furiously scribbling in a notebook. She asked him what he was doing, and he excitedly began explaining how it was about an internet currency. She didn't get it. I mean, you can't just make up a currency, can you? In 2017, it felt like drugs were everywhere in the news. So I started a podcast called On Drugs. We covered a lot of ground over two seasons,
Starting point is 00:22:57 but there are still so many more stories to tell. I'm Jeff Turner, and I'm back with season three of On Drugs. And this time, it's going to get personal. I don't know who Sober Jeff is. I don't even know if I like that guy. On Drugs is available now wherever you get your podcasts. In the summer of 2003, as Jerry was getting ready to start grade 10, the 15-year-old signed on to an online forum called
Starting point is 00:23:25 TalkGold. TalkGold was a forum that was used to promote what are called these high-yield investment programs, which are basically Ponzi schemes. It was shocking. It was shocking. QCX Int made the discovery after a relentless search of every single email he could find linked to Jerry Cotton, from the one he used to register Quadriga and working backwards from there. In the process, QCXint would uncover a colossal number of domain names connected to those emails belonging to Jerry, and shady online activity, which appears to have begun when Jerry first signed up to TalkOld, typing in his username, Scepter. It's a real gotcha moment, I think. And, you know, that was just a breakthrough.
Starting point is 00:24:13 It's kind of the breakthrough I've been looking for in, you know, in the investigation. Going, OK, this, he is Scepter. And if he is Scepter, then there's a pattern of activity that doesn't just stretch back a few months, it stretches back years and years. A Scepter is a baton that's carried by a king or queen as a symbol of authority. It's also a television brand. At the time, the company's logo was a cartoon lizard. Jerry used it for his avatar on Talk Old. cartoon lizard. Jerry used it for his avatar on Talk Gold. And with that handle, Jerry would go down a deep rabbit hole into a vast online netherworld. So Talk Gold was a forum for people to promote their investment programs. Joe Castaldo is a business reporter with the Globe and Mail newspaper in Toronto. It's, um, that's the mattress delivery.
Starting point is 00:25:08 Can I pause that? Yeah. Again, COVID has made all of our interviews a little bizarre. Joe has followed Jerry's movements online, just like QCXN did before him, scouring what's known as the Wayback Machine, a digital archive which stores past versions of websites. Hi, sorry about that. So TalkGold was a forum for people to talk about digital currencies. This was in the era before Bitcoin. These were the earliest forms of internet money. These were the earliest forms people's money. And one of the strange things is like, well, why would anybody put any money into these online investment programs? Like if you look at any of these
Starting point is 00:26:11 old websites, they're just super, super sketchy. And so part of the answer is some people were legitimately duped. But another part is people who knew what was going on, it was a bit like gambling. So the idea is you put money into these programs, you get some return, but you take your money out before the operator shuts it down. So it's this weird mix of Ponzi scheme and online gambling. And that's really what Top Gold was all about. So this is what young Jerry signed up for during his summer holidays in 2003. And it wasn't long before he would be running his very own high-yield investment programs. In the internet archives, you can see by that winter, Scepter is promoting something he
Starting point is 00:26:59 calls SNS Investments. He plugs it by saying, I'm afraid I'm not going to fill this section of the page with the usual bumpf about how your returns are made. We do not invest in stocks, bonds, shares, precious metals, or antiques. All I will say is that we will generate your return and that we are not what is called a Ponzi or pyramid scheme. Nothing says pyramid scheme quite like the denial of a pyramid scheme. He continues, In 48 hours, usually within 18, you will receive a return of anything from 103% to 150%, possibly more. Pretty quick, Scepter is posting daily. For its part, S&S investments didn't last long. Scepter seems to have been unable to keep up with investors' demands.
Starting point is 00:28:07 And early on, he announces that refunds will take some time. Will is in all caps. And he adds, I cannot guarantee that they will all be made quickly. But he's willing to do his best. He asks everyone to be calm and patient. but he's willing to do his best. He asks everyone to be calm and patient. Scepter even comes up with a schedule for how he will pay everyone back. People with curious aliases like Mozart,
Starting point is 00:28:41 skunk toes, Braveheart, and Moolahoobs. It looks like it's going to take months. With his more agitated customers, Scepter is outright petulant. With one, he threatens, If I see another post by you in regards to a refund, you will be null and voiding your right to a refund. Enraged by the impertinence, the investor complains again. This time, SEPTA responds saying,
Starting point is 00:29:08 your name in the database shows DO NOT REFUND. All caps. And you can see too in the messages on TalkGold, the pattern of behavior, the common thread is like a complete lack of empathy for victims, if you like, and a complete carelessness about customer funds. Eventually, Scepter would banish from S&S Investments, leaving Moolah Hoops and the gang wondering if they'd see any of their money again. It took in money from hundreds of users on this site and, you know, shut down and disappeared. Shortly after that, Scepter launched another program called Lucky Invest, did the same thing, took in money from people, then went offline. There's another scheme which popped up around then too. It jumps out because of its name, scheme which popped up around then too. It jumps out because of its name, QuadGold. It promises that, in just 60 days, you will receive a 432% return on your deposits! Exclamation mark.
Starting point is 00:30:16 Now, we can't say for sure whether this was Jerry, but the site did share the same registrant as S&S Investments, a company in Arizona providing anonymous hosting. Joe Castaldo became determined to learn as much as he could about Jerry during his talk-gold days. So using a web of old emails, Joe tracked down someone who had heard from Jerry from a Hotmail account. And he emailed saying, I'm setting up this investment program called UPI. And the email said, you know, I'm actually in some financial trouble. I need $5,000 quickly. Can you help me promote this website? And so I started looking
Starting point is 00:30:59 into UPI. UPI stood for United Private Investment Enterprise, and Joe discovered Jerry was running it from yet another fake name. He went by the name Voltaire. Voltaire was the operator of UPI. Voltaire, as in the philosopher. Clearly, these high-yield investment schemes were not a passing fad for Jerry. By now, he'd moved to Toronto, where he's living in residence. It was his first year of university and he was studying business. But few could have imagined the unusual experience he was getting outside the classroom. And the weird thing about this one is I came across a post post on that forum from somebody who said that he actually met with Voltaire in person.
Starting point is 00:31:49 We knew that Jerry was running UPI, but to actually meet with investors in person is kind of taking these Ponzi schemes to kind of a new level, right? It's not just anonymous online anymore. You're doing this in person. It was it was just, it was just strange to me. Like, did this actually happen? It would have been out of the ordinary for sure. People who run these programs are pretty much always anonymous. Fake names, phony addresses, anything to stay out of hot water. So if Voltaire were to have made an appearance, it would have been pretty wacky. But on the archived UPI site, you can kind of see how it came about. Voltaire is responding to questions and concerns. One person remarks that something is fishy about the program.
Starting point is 00:32:40 Another, a potential investor, asks where UPI is located and how it invests. Voltaire's response is vague. He says they're not in any one place and that he can't share private records. But the good news was he would be, quote, providing full disclosure to those whom I meet on my upcoming trip to Toronto, Canada. If you are willing to meet me in person, I will be willing to share the sensitive UPI information. And then on November 16th, 2006, Voltaire posts, Joe reached out to the guy who claims to have met Voltaire. I didn't expect this guy to talk to me, but he was open and he suggested we actually meet in person.
Starting point is 00:33:36 And he wanted to meet at a Jugo Juice in North Toronto. The guy looked to be in his 50s, Joe says. And though he was willing to discuss Voltaire, he wanted Joe to keep his identity hidden. And so I asked him about the dinner, you know, like, did this dinner actually take place? He insisted this dinner happened. There were other people there. But I really wanted to know, like, who was Voltaire? Did Voltaire show up? And he said Voltaire was a young guy in his 20s with sandy blonde hair. And he showed up in a business suit. And he said that his name was Dan Vanneman. And he was actually from Florida. And he was only up
Starting point is 00:34:21 in Toronto on business to meet with some of his investors. And so I really wanted to know, was Dan Vanneman, in fact, Gerald Cotton? Was he posing as somebody else? So Joe pulls out his phone to show this guy Jerry's picture. And like, my heart's beating really fast because I want to, you know, I really want to know the answer to this question. The guy studies the photo for a good long time and finally says, I don't recognize this person. The man thought Jerry's face shape was different and that he didn't think Dan Vanneman would have lied to him.
Starting point is 00:34:56 Joe was a little disappointed, but then the guy mentioned something else that might help. He told me one other thing, that his friend took a photo of that dinner of Dan Vanneman posing with some of these people. And so I was like, oh my God, a photo, that would be perfect. And so I got super excited. And then he told me, but my friend passed away. I don't know where the photo is. The proof? Gone. Still, we know Jerry had set up UPi, and he had gone by the pseudonym Voltaire.
Starting point is 00:35:30 We also know that Voltaire claimed to have traveled to Toronto and that he'd met investors. And then, when a Dan Bannerman turns up to a vegetarian restaurant, he matches Jerry's description. A young, blonde businessman. We also spoke to the man who claimed to have met Dan Bannerman. He had a long, rambling chat with one of our producers. He seemed quite happy to talk about anything other than the mystery man. He even did his best Bob Dylan impersonation. Ultimately, though, he did say he wasn't sure whether he'd met Gerald Cotton. If indeed it was Jerry,
Starting point is 00:36:14 it was a brazen act. He would have been 18 years old. A childhood friend told us this might be the biggest surprise of all, that this kid they knew was able to trick grown-ups out of money. But what does any of this mean? Is the fact that a young Gerald Cotton ran cons online evidence that Quadrigo CX was a scam from the start? Or could it be the antics of a
Starting point is 00:36:43 smart kid who made some dumb choices? Someone who may have fallen down a dangerous but alluring rabbit hole. But it is worth noting that just a few months before Jerry signed on to Talk Gold, another person using the screen handle Patron joined the forum. Patron would become Scepter's friend on his profile. They were posting a lot in the same threads. They were sort of promoting the same services. You know, Scepter and Patron, like two peas in a pod.
Starting point is 00:37:29 You look at the pattern of posts on TalkGold where they're kind of running flank and running cover for each other. A little more than a year after Scepter signs on, a rumor emerges. It's about the sudden disappearance of Patron from the forum. Someone writes, This individual is in a world of trouble. He has been dealing with some very bad people. And though Scepter may have lost his pal from Talk Gold, there's evidence the two would meet again, several years later.
Starting point is 00:38:04 Coming up next time on A Death in Cryptoland. It wasn't always a Ponzi scheme. It became one. A Ponzi scheme is more successful if it doesn't start as a Ponzi scheme. That's a great way to build trust and goodwill in your system. If it starts legitimate,
Starting point is 00:38:22 we can feel the legitimacy and then we can't feel when it stops being legitimate. and Natasha Aziz and Graham MacDonald. Our digital producer is Emily Connell. Special thanks to Dave Downey, Cecil Fernandez, and Ringnam Wongkong. Legal advice by Sean Moorman and fact-checking by Emily Mathieu. Chris Ope is our senior producer, and the executive producer of CBC Podcasts is Arif Noorani. If you're looking for another podcast to listen to, check out Evil by Design. More than 80 women from around the world have accused the fast fashion mogul Peter Nygaard of rape, sexual assault and human trafficking in incidents across four decades and at least four countries. He denies it all and claims his accusers are lying as part of a vast conspiracy.
Starting point is 00:39:26 Get Evo by Design on the CBC Listen app or wherever you get your podcasts. For more CBC Podcasts, go to cbc.ca slash podcasts.

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