For several weeks now, QuadrigaCX, a Canadian cryptocurrency exchange has been in the news. The story surrounding the exchange is both an unbelievable and entertaining one, and if you’ve been following, we believe it has been both. The latest report from Ernst and Young (EY), the Monitor of QuadrigaCX’s case reveals that CAD 468,675 worth of Bitcoins was sent to the exchange’s cold wallet.
Exchange Owes Millions, Claims Not Having Access To Cold Storage
QuadrigaCX owes its customers over C$190 million. However, the exchange claimed that they are unable to access the company’s cold store wallet where the cryptocurrencies are stored. A cold store is an offline wallet that can only be accessed using a private key. According to QuadrigaCX, the private key was lost because Gerald Cotten, the company’s CEO who is reportedly dead, was the only one who had the keys.
While several individuals and entities have carried out their research to ascertain if there is a cold wallet in existence or even a wallet with a sum of C$190 million worth of cryptos, one has emerged from the monitor. According to Ernst and Young (EY), QuadrigaCX on February 6 sent 103 Bitcoins worth CAD 468,675 (about $370,000) to its cold store wallet.
In a report with Supreme Court of Nova Scotia on February 12, EY stated that:
“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately CAD $468,675 to Quadriga cold wallets which the Company is currently unable to access.”
Unexpected Move to a Cold Store Wallet Allegedly Unaccessible
Now, here’s an intriguing point to note? Why would an exchange who has lost control to a supposed “inaccessible wallet” send funds to it? And a whole $370,000 worth of BTC from a hot wallet which holds less than $1 million when they’re currently looking for ways to compensate investors? Well, it could’ve been a mistake, but how many times do cryptocurrency exchanges send funds to a wrong address?
Lest we forget, the cold store will need a private key before such funds are accessed. At this point, it is uncertain if it’s a cold or hot wallet that is connected to the internet. Nonetheless, all that is needed is time, and the truth will unfold given that several investigations, both from angry investors as well as concerned individuals who are conversant with blockchain transactions are being carried out.
According to EY:
The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.
As BTCNN reported on February 9, QuadrigaCX had also moved almost $1 million worth of cryptocurrencies from the exchange to other cryptocurrency exchanges. The move was suspicious because it occurred between December 2 to December 8, dates that are before December 9 when Gerald Cotten is said to have passed on.