Crypto CEO Dies Holding The Only Passwords That Can Unlock Millions In Customer Coins

Gerald Cotten’s sudden death left C$190 million ($145 million) in Bitcoin and other digital assets protected by his passwords unretrievable. Without the digital keys, clients lose access to digital coins and funds.


Digital-asset exchange Quadriga CX has a $200 million problem with no obvious solution — just the latest cautionary tale in the unregulated world of cryptocurrencies.

The online startup can’t retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan. 31 in Halifax, Nova Scotia. Nor can Vancouver, B.C.-based Quadriga CX pay the C$70 million in cash they’re owed.

Access to Quadriga CX’s digital “wallets” — an application that stores the keys to send and receive cryptocurrencies — appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec. 9 in India from complications of Crohn’s disease. He was 30.

Cotten was always conscious about security — the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, to avoid being hacked, moved the “majority” of digital coins into cold storage.

His security measures are understandable. Virtual currency exchanges suffered at least five major attacks last year.

The problem is, Robertson said, that she can’t find his passwords or any business records for the company. Experts brought in to try to hack into Cotten’s other computers and mobile phone met with only “limited success” and attempts to circumvent an encrypted USB key have been foiled, his widow, who lives in a suburb of Halifax, said in the court filing.

“After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost,” Robertson said. The company’s access to currency has been “severely compromised” and the firm has been unable to negotiate bank drafts provided by different payment processors.

Quadriga CX’s directors posted a notice on the firm’s website Jan. 31 that it was asking the Nova Scotia court for creditor protection while they address “significant financial issues” affecting their ability to serve customers. On Tuesday, the court granted Quadriga a 30-day stay in a bid to stop any lawsuits from proceeding against the company, The Canadian Press reported. The firm was also granted protection from creditors.

“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,” the firm said. “Unfortunately, these efforts have not been successful.”

As is often the case with crypto, the episode has raised speculation on Reddit’s online forums, where posters are wondering aloud if the business was a scam, calling for class-action lawsuits and even concocting conspiracy theories that call into question whether the CEO is even deceased. The latest online speculation suggests that Quadriga CX funds have been moving — even though the firm claims they can’t get access.

Cotten filed a will 12 days before his death listing substantial assets, according to court documents.

He left all his assets to his wife and made her the executor to his estate, the documents show.

The will outlines numerous assets he held, including several properties in Nova Scotia and in Kelowna, B.C., a 2017 Lexus, an airplane, a Jeanneau 51 yacht and his pet chihuahuas, Nitro and Gully.

Author: Doug Alexander

MyCrypto CEO: QuadrigaCX May Not Have Ethereum Cold Wallet, Where’s the Missing $150m?

Taylor Monahan, the founder and CEO of MyCrypto, one of the most widely utilized non-custodial wallets in crypto, has said that QuadrigaCX may never have had an Ethereum cold wallet.

Crypto Wallet CEO Raises Questions about QuadrigaCX’s Claims

After evaluating three main Ethereum addresses used by QuadrigaCX, Monahan said that all of the addresses were likely owned by customers, not by the exchange.

“Based o[n] the actions via ShapeShift, I can only assume they were trading the ETH for BTC on Bitfinex/Poloniex as well. Regardless, these were customer funds. All 3 main addresses ultimately receive ALL customer deposits, which were then sent to a variety of exchanges,” she said.

Earlier this month, as CCN extensively reported, Canada’s largest crypto exchange QuadrigaCX lost its access to customer funds worth $190 million in crypto and fiat.

The exchange stated that its CEO, who had sole control of the exchange’s cold wallet private keys, passed away and the firm is no longer able to access the funds as a result.

Experts Skeptical Toward QuadrigaCX Case, Can $150 Million in Crypto be Recovered?

Throughout the past several days, several reports claimed that QuadrigaCX’s cold wallet addresses have been moving funds.

But, most of the addresses turned out to be hot wallets given the size of the transactions initiated by the wallets.

Large exchanges often store the majority of user funds in cold wallets that are stored offline and cannot be targeted by hackers.

Exchanges like Binance and Coinbase are known to have implemented sophisticated systems to safeguard and protect holdings stored in cold wallets.

Before initiating transactions from cold wallets, major exchanges go through weeks to even months of planning to ensure no technical mishap occurs.

The three main addresses of QuadrigaCX evaluated by MyCrypto CEO Taylor Monahan sent many transactions to different wallets including the addresses of Bitfinex and Poloniex.

Considering that cold wallets of exchanges usually deal with millions of dollars in customer funds, the several thousand ETH sent out by the three wallets show they are unlikely to be the cold wallets of QuadrigaCX.

Speaking to CCN, Monahan said she has yet to evaluate the main ETH address of QuadrigaCX that contains more than 500,000 transactions.

But, based on the pattern of the three addresses, it is entirely possible that QuadrigaCX never had an Ethereum cold wallet.

“I’m seeing NO indication of Quadriga ever having cold / reserve wallets for ETH,” Monahan said.

The MyCrypto CEO added:

“Oh, and just in case you weren’t shaking your head enough, don’t forget that Quadriga ran an exchange with KYC. They have a pile of user’s KYC data. They could turn around and open an exchange account with any of that KYC data to move money.”

Red Flags

In previous interviews, as revealed by Cornell Professor Emin Gün Sirer, former QuadrigaCX CEO Gerry Cotten claimed that the exchange employed a multi-signature system to protect user funds.

A multi-signature system allows individuals or businesses to hold private keys to a certain address. Only when the majority of the keys are combined can the individuals or businesses obtain access to the funds stored in the address.

However, the exchange evidently had not employed a multi-signature system in all of its cold wallets because it was reported that the CEO had full control over the funds.

Jesse Powell, the CEO of Kraken, also raised suspicion on the case involving QuadrigaCX given the absurdity of the situation.

“We have thousands of wallet addresses known to belong to QuadrigaCX and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if the Royal Canadian Mounted Police are looking into this, contact Kraken,” he said.

Author: Joseph Young 
Image Credit: Featured Image from Shutterstock

Tell Billionaire CEO Jamie Dimon He’s The Reason Why America’s Small Businesses Are Dying

The live stream of Jamie Dimon’s address (watch below) at the NY Economic Club opens with the billionaire CEO of JP Morgan Chase pointing out a dearth of activity from American small business entrepreneurs over the last ten years since the Wall Street financial crisis:

“Small business formation is lower than it’s ever been in the United States in recovery. This recovery is ten years long, a little over 20 percent. It’s the most anemic recovery from a major recession we’ve ever had. It should have been 40 percent.”

Jamie Dimon, CEO of Morgan Chase. Flickr.

Yeah, maybe because Wall Street financiers have been hogging up so much capital and credit since 2008 through massive federal subsidies.

Like the $700 billion Wall Street Bailout, the Troubled Asset Relief Program, which Nancy Pelosi and George W. Bush teamed up to help pass.

That is 140x more money than the border fence appropriation that has the government tangled up in a record 26-day long shutdown.

Maybe it’s because last year the federal government raised taxes on upper-middle-class income earners by eliminating the federal tax deduction for state and local taxes.

That’s why House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) had to walk back promises that the Republican tax bill wouldn’t increase taxes on any Americans.

And this ended up being a tax increase on a stratum of income earners that those small business entrepreneurs are aiming at sliding into with a successful small business.

Starting a small business and really making it into something that’s truly thriving involves taking risks and venturing time, and work, and money, and energy, toward the possibility of a big payoff.

But tax increases like this reduce the reward for taking all of those risks and succeeding by bringing something really valuable to the market. That’s stifling to entrepreneurship.

And meanwhile when Wall Street banks take exorbitant risks, if they don’t pay off, the finance industry gets a big bailout from the federal government on the back of a small business.

Maybe it’s because of the monetary brinksmanship of the Federal Reserve bank in expanding the Adjusted Monetary Base by a factor of nearly 5x from 2008 to 2015.

To lend all that new money to Wall Street banks at a discount.

The Adjusted Monetary Base is the sum of currency (including coin) in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks. These data are adjusted for the effects of changes in statutory reserve requirements on the quantity of base money held by depositories.

A radical experiment with a nation’s money to put it in the most charitable terms. And what you see described in the graph above by the U.S. Federal Reserve Bank of St. Louis is one of the major reasons why so much money has bailed out of institutional finance and into cryptocurrency.

Which has ironically driven the creation of many small businesses by enterprising cryptocurrency engineers and entrepreneurs. In 2017 cryptocurrency startups secured nearly a billion dollars in venture capital in 300 different deals.

Author: Wes Messamore 
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Expect ‘Large increase’ in Cryptocurrency Taxes Filed for 2018, Says Bittax CEO

Why did you decide to launch Bittax? Are Bitcoin taxes too cumbersome to calculate for the average person? 

Gidi Bar Zakay: I’ll admit that, like everyone else, I was also prejudiced against bitcoin. But when I was approached by the tax authority while serving in a public position at the Institute of Certified Public Accountants and was asked to comment on a circular that they intended to issue regarding bitcoin, I realized it has potential. That this is what the world needs right now.

Not everyone can calculate crypto taxes from their own home. The regular and familiar calculation method – FIFO (First in First Out) – isn’t so simple to calculate either, but calculating tax in a way that will simultaneously represent the actual activity in coins, prevent double taxation caused by the exchange of altcoins, allow the user to present the whole image, prevent data omission and save tax payments on activity that does not reflect an actual transaction, is a complex task which cannot be performed with Excel or a simple calculator at home.

Is your service aimed at Israeli citizens only or is it global?

The service is currently active in Israel but will soon be exported to the USA and then to Europe.
Our company is currently only listed in Israel, but it is expected to operate internationally.

How does it work – how much is it? Is it simply a self-service calculator or do you have experts that can help clients directly? 

This is how the system works: the user copies their addresses into the system and receives a full overview of their activity.

The users indicate which transactions belong to them, which were forwarded to a third party and which are taking place at the exchange. If the users do not remember certain transactions, the system will make recommendations and attempt to help them remember.

If the users have reached a full overview, the system will warn them of the missing data. The system is unique because of its calculation method. The system does not use the regular and common methods but performs a specific identification of the coins sold and calculates the tax liability accordingly.

This method, patent pending, of which is in the process of being registered, reduces the tax liability by 70-25%, according to the type and scope of activity.

Of course, if the user requires assistance, we are available to guide and assist as much as possible.

What kind of approach does the Israeli government have on cryptocurrency taxes?

The Israeli tax authority treats cryptocurrency as assets and taxes the profits through the capital gains tax. This decision does not come as a surprise – many governments around the world made it, and it is somewhat understandable. Most people don’t use cryptocurrencies at coffee shops and grocery stores, but as instruments for investment and trade.

Once any person would be able to use bitcoin for daily purchases, I believe that most governments will acknowledge it is a tax-free coin.

How many people around the world do you estimate owe cryptocurrency taxes today? In other words, how big is your potential market? 

When examining the activity data from the different exchanges, we are looking at hundreds of millions worldwide.

How many of them currently pay taxes?

Very few. This process will take time, for both the users and the authorities.

Once the coin owners will understand that regulation will result in international adoption of the coins, and the governments will understand how to collect these taxes and how to proactively approach the users, this process will unfold naturally. I expect to see a large increase in the number of reports filed for 2018 in two or three months and an even greater increase in the reports for 2019.

Bitcoin Taxes

A poll in April 2018 revealed most people saying ‘you’ll never catch me’ when it comes to paying taxes on their crypto gains. Is this a problem for the tax agencies? Is it difficult for the gov’t to determine whether an individual owes taxes in this case? 

We’ve heard these statements from the global crypto community, and we can understand them. As a group, we believe in the ideology of a decentralized system and find it difficult to accept that someone else does not view crypto as a coin and demands taxes for it. But today, we can see that the authorities around the world receive the information.

The authorities approach some of the exchanges and demand to receive the data. Many countries grant them the power to do so. Some of the exchanges share the information following the authorities’ request, and once the data is in their hands, it is not difficult to reach the users.

Do you think the bear market of 2018 was partially due to the billions owed in taxes from the previous year resulting in ‘massive selling’ as Tom Lee suggested?

I think that the market’s decline is the positive outcome of people who tried to use crypto in order to make easy money without actual activity backing it, and then left when they realized that the celebration is over. I think that the market is in excellent condition. Those who stayed are the people who truly believe in the future of cryptocurrency and are genuinely interested in developing it.

Considering that 2018 was a downward year for cryptocurrency prices across the board, would filing taxes on crypto losses be particularly recommended this year?

If someone had a profitable activity at the beginning of 2018, through coins or other capital channels, it would be helpful for them to report their losses at the end of 2018. However, it will not be possible to offset losses incurred in 2018 against the huge profits gained in 2017.

What is the best jurisdiction to consider for people who’d like to pay little to no crypto taxes? 

The authority to which crypto-related taxes are paid is determined by the user’s tax residency. The tax residency is determined by, among other things, the number of days spent in the country during the relevant year.

Some countries are friendlier towards cryptocurrency, and I’ve heard of some that even treat crypto as a coin. But will a person leave everything and move to another country simply for tax considerations? Then they must have an abundance of crypto… I would love to meet that person. It’s possible that the entire world has been looking for their identity for the past few years.

What are your predictions for the upcoming year? Do you expect more and more people to start paying cryptocurrency taxes?

I believe that in 2019 we will be looking at a continued effort to closely supervise the crypto market by the authorities, accompanied by an increase in tax payments by the users. What matters now is making sure that the privacy of the tax-paying users will not be affected.

Therefore, we are working on a solution which will maintain the privacy of the users throughout their relationship with the tax authorities, and will only expose the necessary information, addresses and personal data not included.

This solution will be beneficial for both the tax authorities and coin owners around the world because it’ll be worthwhile for the users to report their earnings willingly and not wait for the authorities to locate them.

Author: Allen Scott
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Crypto 2019: Experts Predict Adoption But Also Losses

Investors will have more realistic expectations.


2018 was a thin harvest, but leaders of the crypto space are forecasting a bumper year in 2019. Leading executives at several blockchain startups expect adoption replacing speculation in the coming year, with regulatory clarity bringing in institutional players to create a stable market.  That said, some cautioned that the good harvest would only come after a harsh winter.

Xinshu Dong, CEO of Zilliqa, a Singapore-based blockchain platform, expects cryptocurrencies to find use in a diverse range of use cases. There will also be the opportunity to find solutions for operational pain-points, such as scalability, he says.

We will see a wave of widespread use cases in 2019 as organizations looking to implement and develop blockchain applications become more focused,” Dong told Crypto Briefing via email. “[It] may indeed be the year we address the existing challenges, see traction for the technology beyond the testnet phase, and welcome many far-reaching dApps.”

“So it is very likely that we will see some compelling use cases emerge,” he added.

Institutional adoption

Predictions at the start of 2018 had been particularly bullish. In a period of intense market euphoria, analysts were quick to forecast a trillion-dollar crypto market; Tom Lee from Fundstradt even predicted that Bitcoin (BTC) could trade for $25,000.

Needless to say, that didn’t happen, and a series of slides took the market down by approximately 84%, at the time of writing.

But price may not count for as much next year. “2018 has been a rollercoaster of a year for blockchain and crypto, with the focus being very much on market movements and the need for increased regulation in the space,” said Gabriele Giancola, CEO and Co-founder of qiibee, a blockchain-based loyalty project. “Moving into 2019, and further down the line, I believe we will begin to see a separation between hype and reality.”

Many see 2019 as the year institutional players make their move. Max Kordek, co-founder and CEO of Lisk (LSK), a blockchain platform, said that technological progress will mean blockchain can be slowly accepted by big business and governments. He believed that increasing adoption will lead to a change in views;  cryptocurrency will be treated less like a pariah and more as an alternative asset.

This was reflected by Craig Mc Gregor, CEO of the DSTOQ exchange, who argued cryptocurrency could become an ideal independent store of value. With greater regulatory clarity and a mature market, institutional investors could see cryptocurrencies as an ideal investment opportunity.

“Investors are looking for alternative opportunities to make profits and need alternative asset classes. This is why, the new asset class and technology is an attractive opportunity,” Mc Gregor said. “We see many big projects form some of the biggest players in the pipeline and expect 2019 to be a major year for cryptocurrencies as well as blockchain in general.”

Crypto 2019: It’s not all positive

Many figures see cryptocurrencies moving from the generalized function of ‘one coin to rule them all’, to a more industry-specific utility. Roger Lim, head of NEO Global Capital, said sophisticated projects will begin to target specific industries. But he also said there would likely be a cull: “With competitiveness rising, the blockchain industry is bound to undergo some sort of consolidation and the projects best equipped with a “survival of the fittest” mentality are the most likely to succeed,” he said.

Lim was not alone in emphasizing that the coming year will be mostly uphill. “Contrary to popular opinion, 2019 will not be about exciting new ways to use blockchains,” said Decred co-founder Jake Yocom-Piatt. “It will be about which cryptocurrencies get the fundamentals right, organize their collective intelligence, and can endure the gyrations induced by ignorant prospecting. Just like during the dot com bubble, endurance matters.”

Some businesses are already suffering from the extended bear market; Binance halved its profit forecasts to $500m. As Crypto Briefing extensively reported, ETCDev – the core developer for Ethereum Classic (ETC) – ceased operations last week by keeping all its assets in virtual currencies.

2018 was a transformative year for cryptocurrencies. Expectations have been lowered but long term, this will be beneficial. The sector doesn’t need hubris; it needs tangible products. Otherwise, what’s the point?

Author: Paddy Baker
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Incoming Goldman Sachs CEO David Solomon More Keen on Bitcoin Than Predecessor

Goldman Sachs announced today that David Solomon will be the company’s new CEO, shortly before the quarterly earnings call. Lloyd C. Blankfein will be stepping down as CEO, who began his tenure in 2006 and led the company through the dicey recession of the late 2000s.

Notably, Mr. Solomon is not the usual investment banker and investors expect him to shake up business as usual, according to the New York Times. He works as a DJ (under the name D.J. D-sol) in his free time, specializing in electronic dance music.

Solomon has stated that Goldman must “evolve its business and adapt to the environment,” if it is to stay competitive. Mr. Blankfein, the exiting CEO, was criticized before being slow to adapt the business.

Goldman Sachs smashed expectations for quarterly revenues on the earnings announcement today. Profits increased by 40% in Q2 alone ($2.47 billion), according to CNBC.

Building on Goldman’s Enthusiasm for Cryptocurrency

As CCN reported in June, Solomon showed interest in bitcoin and other cryptocurrency investments. The exiting CEO Mr. Blankfein’s interest in cryptocurrency has warmed through his tenure. On June 21, he went on the record saying that it’s “arrogant” to think cryptocurrency won’t be successful.

Currently, Goldman Sachs backs companies in the crypto space, such as the Circle, a parent company behind several large exchanges and startups. Based on Solomon’s comments, however, it’s safe to assume that the firm’s bullishness toward crypto and its technology will stay strong.

It should be kept in mind that Goldman Sachs denied that Mr. Blankfein would be resigning. Prior to the June interview with then-COO Solomon, the firm had also denied that they were creating a cryptocurrency trading desk. But as CCN reported, the firm had been working on a trading desk. As part of their trading desks and futures contracts, the firm has pushed to receive regulatory acceptance for cryptocurrency.

So far, it’s clear that Goldman Sachs plays their cards close to their chest. The announcements, therefore, come somewhat as a surprise, so cryptocurrency investors should keep abreast of the firm’s work and investments.

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author Jack Mathis  
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Deutsche Bank, With New CEO, Signals a Humbler Future

Christian Sewing succeeds John Cryan atop German bank; Marcus Schenck to leave lender

Deutsche Bank AG replaced its British chief executive, John Cryan, with the senior German head of its retail bank, a switch that signals a less ambitious future after years of grim financial results and sputtering attempts to regain a spot among global investment-banking powerhouses.

Germany’s biggest bank, struggling after a string of money-losing years, named Mr. Cryan’s replacement, an executive steeped in auditing, risk control and retail banking. Mr. Cryan will leave at the end of this month, Deutsche Bank said.

New CEO Christian Sewing has spent more than 25 of his 47 years at the Frankfurt-based lender, starting as an apprentice banker and rising to the management board three years ago. He has held senior risk and audit roles in London, Tokyo and Toronto but has a low profile outside of Germany.

The departure of Mr. Cryan, a former investment banker, and the elevation of Mr. Sewing struck investors and executives at other banks as moving Deutsche Bank closer to a potential merger with another European bank, possibly in Germany. Such a possibility has long been discussed. A smaller, more regionally focused Deutsche Bank could make a match-up more pragmatic, bankers and investors said. Deutsche Bank didn’t immediately comment.


The CEO change, which is effective immediately and came after a Sunday evening conference call of the bank’s supervisory board, also presages a lower-profile Deutsche Bank, say people close to the firm. The bank has been one of the few remaining in Europe with ambitions to compete globally against the U.S.’s trading and investment-banking powerhouses.

It has vast global trading operations and a huge presence in complex derivatives and fixed-income securities. But regulators at the European Central Bank, as well as in the U.S., have become wary of its size and its weakened financial position. The ECB declined to comment.

Investors and current and former employees expect Deutsche Bank to further curtail its trading operations, once the cash cow of the investment bank, in moves described by people close to the lender as driven partially by pressure from European and U.S. banking regulators.

While investment banks broadly have struggled since the financial crisis from a mix of tighter regulation and muted client activity, the German bank has slumped worse than its counterparts. European banks including Deutsche Bank were slower than U.S. peers to repair their balance sheets in the years right after the 2008 meltdown. That hurt Deutsche Bank later when it had to dial back risk and raise capital. Also, Deutsche Bank still has a greater share of its revenue tied to volatile investment-bank and trading businesses than its peers.


Regulators have heard concerns about Deutsche Bank from other big banks that trade with it, according to people familiar with the matter. Among concerns voiced, the people say, is that although Deutsche Bank’s capital cushion is stable after it raised billions of dollars in a share sale last year, a big market shock, unexpected legal fines or other crisis could set market confidence in Deutsche Bank back to where it was in late 2016 when counter-parties pulled away, fearing a capital crisis.

Other European banks, lagging behind stronger U.S. rivals in profitability and share performance, also feel pressures. But Deutsche Bank has had an outsize share of internal turmoil, exacerbated by a prolonged restructuring and an executive suite divided over matters including bonuses and technology spending.

Tensions were bad enough in recent weeks that supervisory-board members have been bracing for the possibility of multiple executive departures, according to people familiar with private board deliberations.

Since January 2016, Mr. Sewing has overseen Deutsche Bank’s private and commercial-banking division, which includes the lender’s network of German retail branches.

Mr. Cryan had been an investment banker and a finance chief at the Swiss bank UBS AG . His high-profile predecessor, Anshu Jain, was a consummate banker who rose to power during Deutsche Bank’s pre-crisis years of high-leverage trading and huge profits.

Last year, Mr. Sewing was named one of two co-presidents reporting to the CEO he now replaces. The other co-president, Marcus Schenck, is leaving the bank.

Mr. Cryan, a Briton brought into the CEO role in mid-2015, has two years remaining on his contract. He said two weeks ago in a memo to employees that he was “absolutely committed” to serving the bank. That was in response to media reports that Deutsche Bank’s chairman, Paul Achleitner, was shopping outside the bank for replacement CEO candidates.

As recently as last week, both of Deutsche Bank’s investment-banking co-heads were in discussions with the bank about potentially leaving, the Journal previously reported. One has decided to: Mr. Schenck, until recently considered a potential candidate to one day become CEO, is departing effective next month. He told the supervisory board before Easter that he intended to leave, Deutsche Bank said in its statement.

The other, Garth Ritchie, will now oversee the investment bank as its sole chief, Deutsche Bank said Sunday evening. He and another executive, Karl von Rohr, were named presidents, replacing Messrs. Sewing and Schenck in those positions.

Deutsche Bank has sent mixed messages to investors and employees over the past few months. Mr. Achleitner has faced unrest among big investors he courted who have become alarmed at Deutsche Bank’s share-price declines, people close to the bank and investors say.

Mr. Achleitner said in a statement that Mr. Cryan played “a critical role” at the bank, but that “following a comprehensive analysis we came to the conclusion that we need a new execution dynamic in the leadership of our bank.” He said the supervisory board views Mr. Sewing as “a strong and disciplined leader,” adding, “We trust in the great ability of this bank and its many talents.”

Deutsche Bank stock is at €11.35 ($13.94), down 29% this year. The shares have lost more than half their value in less than three years.

Some of the people said Mr. Achleitner told investors and others, including some outside executives he approached to discuss the CEO role, that Deutsche Bank has the right strategy but hasn’t executed it well enough. Mr. Achleitner has told financial executives that the market misunderstands Deutsche Bank, which he said mainly needs new energy in its executive ranks.

The message wasn’t persuasive, said one person close to a major investor and other people Mr. Achleitner spoke with.

Some investors said they are aghast at how tumultuous the past few weeks have been, with tales of Deutsche Bank infighting and private CEO discussions spilling into the open. A lot of that focus has fallen on Mr. Achleitner.

“Mr. Achleitner will have to explain this decision much more fully, because [Mr. Cryan] is his hand-picked CEO,” said Hans-Christoph Hirt, head of Hermes EOS, which advises shareholders holding just over 0.5% of Deutsche Bank shares.


Last week, banking analysts publicly disagreed with Mr. Achleitner’s notion that Deutsche Bank’s strategy is on track.

JPMorgan Chase & Co. analysts called for Deutsche Bank to shed U.S. corporate clients and shrink its trading business there. They said the lender had little hope of making enough money to justify its U.S. investment-banking ambitions.

Another analyst expressed frustration that Deutsche Bank wasn’t accepting that its costs are too high compared to profits, with no easy way to fix the problem. “To get really excited about Deutsche shares we need to see a full strategic overhaul, rather than tinkering,” wrote Stuart Graham of Autonomous Research, calling for “radical action.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Jenny Strasburg
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