QuadrigaCX, the Canadian cryptocurrency exchange that purportedly lost $250 million CAD ($190 million USD) of customer funds when the company’s CEO died, was appointed the professional services firm Ernst & Young (EY) as their monitor by court order on February 5, 2019.
The Big Four auditing firm has since released 3 reports in the creditor protection proceedings of QuadrigaCX. The third report was released on March 1, in which the firm identified 6 crypto Quadriga wallets primarily used to store Bitcoin (BTC).
Quadriga Wallets Empty and Unused
What’s interesting is that out of the 6 wallets identified, all but 1 received no deposits and were inactive since April 2018. There was only 1 wallet that had an inadvertent Bitcoin transaction of nearly $500,000.
The third Ernst & Young report states:
“To date, the Applicants have been unable to identify a reason why Quadriga may have stopped using the Identified Bitcoin Cold Wallets for deposits in April 2018, however, the Monitor and Management will continue to review the Quadriga database to obtain further information.”
Unidentified Quadriga User Accounts
Apart from the seemingly abandoned crypto wallets, the auditing firm also discovered 14 user accounts that were seemingly created outside the normal practices of account creation by QuadrigaCX. As well, these identified accounts were created under various aliases.
As stated in the report:
“The Identified Accounts were internally created without a corresponding customer and used to trade on the Quadriga platform. [Ernst & Young] was further advised that deposits into certain of the Identified Accounts may have been artificially created and subsequently used for trading on the Quadriga platform.”
Moreover, in an effort to secure transaction and account balance data from the platform, Ernst & Young attempted to retrieve QuadrigaCX data stored on the cloud by Amazon Web Services (AWS). However, EY was denied access by AWS, the report stated:
“Due to the account being a personal account in the name of Mr. Cotten, AWS has indicated that it is unable to provide the Monitor with access to the AWS Account to permit a copy of the data that it is hosting to be secured.”
Funds Being Held on Alternative Crypto Exchanges?
As previously reported by IIB, there is a strong possibility that large amounts of Quadriga’s cryptocurrency are being stored on alternative crypto exchanges, specifically Poloniex, Bitfinex, and Kraken.
With EY’s new report showing that 5 of the 6 primary QuadrigaCX wallets were inactive since April 2018, it could be speculated that they were inactive because deposits were being made to other crypto exchanges instead of to Quadriga’s wallets.
However, this case is still being analyzed and nothing is certain as of yet.
Kraken, a popular licensed and regulated crypto exchange, is offering a $100,000 reward to anyone who provides tips and information that leads to the discovery of QuadrigaCX’s missing funds.
As stated by the exchange:
“All leads collected by Kraken will be provided to the FBI [Federal Bureau of Investigaion], RCMP [Royal Canadian Mounted Police] or other law enforcement authorities, who have an active interest in this case.”
Do you think investigators will be able to find Quadriga’s lost funds? Or are they lost forever in cold storage wallets? Let us know what you think in the comment section below.
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