QuadrigaCX Wallets Empty Since April 2018

Ernst & Young, the Big Four audit firm assigned by the Canadian Supreme Court to be the Monitor for QuadrigaCX in its creditor protection proceedings, released its third report on the case on March 01.

Filing for Creditor Protection

Early in February the Canadian crypto exchange QuadrigaCX officially filed for creditor protection after the untimely death of its founder and head Gerald Cotten.

The company was forced to do this because it owed its customers C$260 million and the exchange claimed that it had lost access to its cold storage wallets. The company stated that Cotten was the only one who had the encrypted private keys to those wallets, which was why it could not get to the funds in the wallets with which it could have paid pack its customers.

After QuadrigaCX filed for protection from its creditors, the Canadian Supreme Court approved the application and appointed Ernst & Young as the Monitor for the case. Since then, all parties have been trying to figure out where the missing were and how to access them.

Third Report of the Monitor

In its third report, Ernst & Young stated that it had identified 6 different cryptocurrency wallets that had primarily been used to store BTC (Bitcoin), which is the crypto that the platform traded in the most. However, apart from a BTC transaction worth $500,000 in April 2018, there had been no other deposits in any of those wallets.

The firm’s report also stated that they had not be able to find a reason why the cryptocurrency exchange had stopped using those wallets. It also stated that the company’s management and the Monitor would continue monitoring Quadriga’s database to garner more information.

Ernst & Young’s report further stated that it found 14 users’ accounts that looked like they had been created outside the regular framework set down by Quadriga, and that these accounts had been opened using aliases.

These 14 accounts had been created from within the company, with no corresponding customers. The report noted that deposits had been made into these accounts, which had subsequently been used for trading on the exchange’s platform.

Ernst & Young also tried to get the account balance as well as transaction data about Quadriga which had been stored on Amazon Web Services’ cloud. However, the firm had been unsuccessful in access that data because the account was not under the exchange’s name, rather, was listed personally under Cotten’s name.