By
Bhushan Akolkar
April 29th, 2024
Canadian crypto exchange QuadrigaCX has faced with new misfortune. It moved 103 Bitcoins to a wallet that it doesn’t have access to.
Though from childhood we hear from everyone that it’s important to stay an optimist in any situation, for Canadian crypto exchange QuadrigaCX it may be rather difficult now when one trouble is just followed by another one.
What Happened
As CoinSpeaker has already reported, the exchange has faced with a risk to be sold after the unexpected death of its CEO. Let us remind, that 30-year-old Gerald Cotton died in December and now, as it is said by the exchange representatives, nobody has access to a significant amount of users’ cryptocurrency since nobody knows the password to the exchange’s wallets.
As a result, 115,000 customers are deprived of their right to use their fiat and crypto assets. The exchange asked the court to give it a month to find a solution. Nevertheless, its lawyers say that one of the possible ways-out is selling the exchange to get money to cover its debts.
New Trouble
But it’s not the end of the company’s misfortune. Now it lost nearly $370,800 (CAD $468,675) by mistake. As it has been revealed in the report of court-appointed monitor Ernst and Young (EY), the exchange accidentally transferred more than 100 Bitcoins to a storage wallet that is currently inaccessible.
EY experts wrote in the report:
“On February 6, 2019, Quadriga inadvertently transferred 103 Bitcoins valued at approximately $468,675 [CAD] to Quadriga cold wallets which the Company is currently unable to access. The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”
Now it is planned that EY will take control of the exchange’s remaining hot wallet funds and will move them to its own cold storage. According to the report, the remaining funds at the current moment include 51 BTC, 33 BCH, 0.014 BHC SV, 2,000 BTG, 800 LTC and 950 ETH.
It is also said that EY will control not only the funds of Quadriga but the electronic devices that were used by Cotten as well. Among them, there are laptops, smartphones and encrypted USB keys.
EY has also reported that it tried to collaborate with some third-party payment processors with a view to get access to the fiat balances of the exchange, nevertheless, they still haven’t managed to succeed.
What Experts Think
However, some experts have already voiced their doubts whether we can trust the information provided by QuadrigaCX. For example, Kraken CEO Jesse Powell, named this story bizarre and, frankly unbelievable. A number of analysts and industry experts have said that they are not sure whether these cold wallets of the exchanged had ever existed.
But as the recent monitor has revealed that 103 Bitcoins were moved to a cold wallet, it may mean that at least this currently inaccessible storage exists.
It is expected that EY will continue its work with the company and will try to find the key to the exchange’s crypto wallets by examining the devices owned by CEO Gerald Cotten.