Empty wallets turn up in QuadrigaCX crypto exchange case
The curious case of Canadian crypto exchange QuadrigaCX got a lot more curious when empty wallets were uncovered.
The deceased CEO of QuadrigaCX – Gerald Cotten
As reported last month, the CEO of QuadrigaCX – Gerald Cotten – died in India and up to $190 million in clients’ funds were trapped as a result.
QuadrigaCX said it cannot repay most of the money in client holdings after its 30-year-old founder, the only person who knew the passwords to its “cold storage,” unexpectedly died. Cotten also filed his will 12 days before he died.
This was followed by a Wall Street Journal (WSJ) report, in which two independent researchers said publicly available transaction records associated with QuadrigaCX suggest the money may be gone, not trapped.
A few days ago, a Canadian judge in Nova Scotia issued an order for the disbursement of more than $30 million that belonged to the insolvent crypto exchange.
However, in the latest twist, Ernst & Young (EY) have published their third monitor report as part of this Nova Scotia case – and if you can get through the bone-dry 50 pages – it’s a tale of empty cold wallets.
To keep a very long report short – EY explains: “In April 2018, the remaining Bitcoin in the Identified Bitcoin Cold Wallets was transferred out bringing the balances down to nil.”
Note, EY adds: “The applicants have identified three other wallet addresses which may represent Quadriga cold wallet addresses used to store other cryptocurrencies (the ‘Potential Other Cold Wallets’).”
Those other ones are an interesting angle and will require more investigation by EY and the media.
Let’s not forget – the situation around QuadrigaCX is very fluid – with a lot of other activity going on.
Crypto exchange Kraken is offering a $100,000 reward for information about the missing QuadrigaCX funds.
In addition, The Globe and Mail reports that a QuadrigaCX co-founder served time in US for his role in an identity-theft ring. Michael Patryn helped launch QuadrigaCX’s trading platform in 2013 alongside the late Cotten.
The EY report is here.
