QuadrigaCX Accidently Moved BTC to Cold Wallet

| Publish date: 02/13/2019

The Canadian cryptocurrency exchange QuadrigaCX, which already owes its customers approximately C$250 million (~$190 million), accidently transferred almost C$500,000 (~$379,000) to its cold storage wallet by mistake last week.

Monitor’s Initial Report

When QuadrigaCX applied for creditor protection late in January this year, the court appointed Ernst & Young as the exchange’s monitor. The firm released its initial report on Tuesday, which detailed the company’s progress.

It was in that report that it was revealed that QuadrigaCX had moved more than 100BTC (Bitcoin) by mistake into the cold storage wallet that is been inaccessible to the company.

The company, when filing for its creditor protection, had stated that its Chief Executive Officer Gerald Cotten had been the only one who had access to the cold storage wallets. Cotten had died in India in December due to complications of Crohn’s disease, leaving the company with no way to access those funds.

The report stated that on February 6, 2019, the cryptocurrency exchange moved 103BTC which amounted to about C$468,675 (~$354,763) to the very same cold wallets that QuadrigaCX was unable to access to pay back its users.

In its filing, the cryptocurrency exchange stated that it owed C$180 million (~$137 million) in cryptos to its customers. However, it did not offer details about how the money was divided between its hot and cold wallets.

Now, the Monitor’s report indicates that at the time of filing, QuadrigaCX had C$902,743 (~$682,000) in hot wallets. This would mean that about C$179 million (~$136 million) were locked in the cold wallets.

The report went on to say that the Monitor was working with the exchange’s management to try and recover the cryptos stuck in its various cold wallets.

QuadrigaCX’s Current Status

The Monitor will be taking control of the assets that are still in QuadrigaCX’s hot wallet. Funds include 51BTC, 950ETH, 2,000BTG, 800LTC, 0.014 BSV and 33BCH. All these funds will be transferred to Ernst & Young’s cold wallet.

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Ernst & Young has also taken control of the various electronic devices Cotten has used for conducting QuadrigaCX’s operations. This included 4 laptops, 3 encrypted USB keys as well as 4 cell phones. All these devices have been kept in a safety deposit box that the Monitor rented until such time its forensic team figures out how to unlock them.

The firm also stated that it was working with various third-party payments processors in an attempt to unlock the cold storage wallets. So far, however, no progress has been made.


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