Tuesday, April 23, 2019

QuadrigaCX Exchange Moved Nearly $1 Million Worth of Ethereum Before CEO’s Death

Popular in the news of late, is the Canadian cryptocurrency exchange, QuadrigaCX. The latter who claimed to have lost access to C$190 million worth of cryptocurrencies after its CEO’s death is currently being investigated by cryptocurrency experts. One of such has led to a report from Coindesk which reveals that the exchange had moved almost $1 million worth of Ethereum from its hot wallet prior to the CEO’s death.

9,000 Ethereum Was Transferred From QuadrigaCX Change

Per the report, QuadrigaCX had transferred over 9,000 Ethereum worth almost $1 million between December 2 and December 8.  Therefore, these transactions have raised a lot of concerns because they occurred before December 9, the dying day which was specified on Gerald Cotten’s death certificate.

In the same vein, the analysis pointed out that most of the funds were sent to Binance. On December 6, 177 ETH was sent to Bitfinex and on December 8, 386 ETH was sent to Kraken. The total virtual asset that was transferred to each exchange is Binance (4,550 ETH), Poloniex (2,400 ETH ), Bitfinex (1,609 ETH), and Kraken (883 ETH).

The Possibility of Transfers Being Made by a Customer

Furthermore, the report informed that it is possible that the transfers were made by a customer of the platform, the exchange, or both. It was also noted that due to the difficulties faced by the exchange in accessing their funds which had been frozen by the Canadian Imperial Bank of Commerce, it makes sense to have sought for other ways to raise funds to operate the exchange.

According to Taylor Monahan, Mycrypto’s CEO:

 If you have a strained relationship with your banking partners, you may choose to obtain fiat via another mechanism. So it wouldn’t surprise me if an exchange used an [over-the-counter] desk or another exchange in the space in order to move ETH or BTC into fiat and ultimately pay bills.

While Mohanan’s theory explains what may have led to this transfer, the media was not too quick to agree. Reportedly, Binance and Poloniex were not allowing conversion to fiat money at the time these transactions were made. In the case of Binance, they had only begun to allow such conversion in January. Thus, one cannot conclude that it was meant to be withdrawn in fiat in order to keep the platform running.

Could the Claims be True or False?

Events of this nature have made the exchange’s claims hard to believe. It has also drawn the attention of those who are familiar with transactions that occur on the Blockchain. Nevertheless, if these claims are true, then there’s really nothing to discover after thorough investigations have been carried out.

BTCNN on February 6 also outlined some reasons why the recent events on QuadrigaCX’s exchange are suspicious. One of such is the exchange’s reluctance to inform people about the CEO’s death right after he died. Many are still uncertain if he is really dead. Thus, suggestions have been made to possibly carry out a search operation by asset recovery lawyers

 

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