Missing Digital Assets

$145 Million Worth Digital Assets Stuck in QuadrigaCX Could Actually Be Missing

In December 2018, Gerald Cotten, founder of major Canadian crypto exchange QuadrigaCX, passed suddenly. He was allegedly the sole executive with access to the cold wallets of the exchange. Consumers have not been able to withdraw funds owed to them, and the exchange has searched for creditor protection in Canadian court.

A filing from Ernst & Young states –

“Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units.”

‘Big four’ auditing firm Ernst & Young was appointed an independent 3rd party for monitoring the creditor protection proceedings.

Users of the platform have gone suspicious of the situation surrounding Cotten’s death, with some asking for an obituary. On Thursday, Bloomberg reported that Cotten filed a will 12 days prior to his death. He reportedly signed his last will in November 2018, designating his wife as the only beneficiary of his estate.

A cryptocurrency analyst, James Edwards, reportedly reviewed the publically available transactions of the exchange, and found no evidence that the exchange is controlled any of the wallets it claimed to.

He purportedly wrote in a report,

“It appears that there are no identifiable cold wallet reserves for QuadrigaCX.”

As indicated by Edwards, there is evidence to suggest that wallets with larger balances once existed, but those are very low in balance. At press time, the largest wallet is apparently a hot wallet used for transactional purposes.

Other experts and execs in the crypto world have shown their skepticism about the exchange’s financial woes.

The CEO of cryptocurrency exchange Kraken, Jesse Powell, tweeted on February 2nd –

“The story was bizarre and, frankly, unbelievable. Powell even suggested that the Royal Canadian Mounted Police contact his exchange as it has thousands of wallet addresses known to belong to QuadrigaCX, which Kraken is investigating”

Earlier today, the BCSC (British Columbia Securities Commission) told Reuters that QuadrigaCX does not fall under the commission’s regulatory purview. The exchange was actually unregulated since there was purportedly no sign that it traded securities or operated as an exchange.