Funds Moved from QuadrigaCX before Collapse

New information has come to light about the QuadrigaCX controversy. Latest reports show that there were funds moved out of QuadrigaCX before the apparent collapse of Canada’s biggest cryptocurrency exchange.

Funds Transferred Out of QuadrigaCX

According data reviewed on public Blockchains, almost $1 million in ETH (Ether) was transferred from QuadrigaCX to other cryptocurrency exchanges in December – around the same time that the Canadian cryptocurrency exchange’s founder and Chief Executive Officer Gerald Cotten died.

The data shows that a series of transactions were carried out from the Canadian crypto exchange’s hot wallet (the server that houses the digital assets and is connected to the internet). More than 9,000ETH were moved from QuadrigaCX to various accounts in Bitfinex, Kraken, Binance and Circle-owned Poloniex.

About 5,000ETH from that amount was transferred between December 2 and December 8, just before Cotten’s reported death in India. Of the 5,000ETH, 4,550ETH was sent exclusively to Binance that week alone.

All in all, for the month of December, QuadrigaCX transferred 2,400ETH to Poloniex, 883ETH to Kraken and 1609 to Bitfinex – over and above the 4,550ETH sent to Binance.

At this point, it is now known whether the transactions were made by the exchange, the customers of the exchange or both. However, because of the fact that the company has been facing huge issues with regard to its finances, the movement of funds       from the exchange have now come under scrutiny.

Possible Reasons for Transfer

There has been intense speculation as to why QuadrigaCX would have transferred such large sums of money to other exchanges.

One possible reason put forward is that the exchange had transferred the funds itself because it needed to convert cryptos into fiat currency to continue funding its operations. Since the company’s bank accounts had been frozen last year, which meant that the exchange could access the $22 million in those accounts.

However, this explanation does not hold water, since neither Poloniex nor Binance had the facility for fiat-to-crypto transactions at that time. Binance has only recently – in January – launched its fiat-to-crypto exchange. Thus, sending funds to those two exchanges would not have helped QuadrigaCX raise money.

Questions About Cold Storage Wallets

Cotten’s widow, Jennifer Robertson wrote in her affidavit that her husband used to move the majority of the exchange’s funds to cold storage wallets for security purposes. She also stated that her husband was the only one who could access those wallets, because of which no one was able to access them.

However, experts are suspicious about this story. According to experts, there are no Ether-based cold storage wallets.