The plot is thickening when it comes to the aftermath of QuadrigaCX’s recent debacle. Now, recent reports have surfaced alleging that some of QuadrigaCX’s cold wallets have been found to be empty – meaning many millions worth of funds are unaccounted for.



EY has discovered empty QuadrigaCX wallets



To recap, all of this began this January, when QuadrigaCX announced that it had lost access to approximately $150 million following the supposed death of the exchange’s CEO, Gerald Cotten. The narrative that QuadrigaCX’s CEO suddenly passed away whilst being the sole person with access to customer funds.



This set off a flurry of activity aiming to get to the bottom of this affair. Now, however, QuadrigaCX’s court-appointed auditor has supposedly revealed that the exchange’s cold wallets are said to be empty. This would directly contradict the narrative that the, now deceased, Cotten was the only one holding the private keys to the funds



Specifically, EY recently released a report – the third one so far – into its investigation of the QuadrigaCX fiasco. According to this, several of QuadrigaCX’s Bitcoin wallets have been found to be largely empty.



Specifically, EY reportedly managed to identify six cold storage wallet addresses. Moreover, these were said to be empty except for 104 Bitcoin – worth approximately $400,000. These funds are said to have been mistakenly transferred to the cold wallets in a “platform setting error.”



This is especially notable seeing as no information about the Bitcoin addresses had previously been released. Furthermore, it means that the majority of funds owed to customers – 26,350 Bitcoin, or around $100 million worth – are still at large.



Could user funds have been moved?



This has led to widespread speculation regarding where the funds may be located. What’s more, it lends some credence to last week’s report by cryptocurrency researcher James Edwards, who claimed around $90 million worth of QuadrigaCX’s user funds were moved to cryptocurrency exchanges such as Poloniex and Bitfinex.



All of this makes the QuadrigaCX debacle even more suspicious, and several industry profiles have questioned the official story. For example, Coinbase’s CEO, Brian Armstrong, has proposed that the company may have struggled with liquidity this past January, brought about the bear market.



“Gerald Cotten reportedly died in early December 2018. But complaints about withdrawal issues on Quadriga escalated in mid 2018. So maybe after about a month of debate [Dec – Jan], management decided to cut losses and release a statement claiming that access to money was lost with the CEO’s death?”



It remains to be seen how this story develops in the coming weeks, as investigations into the matter continue. However, the fact that no substantial funds have been found as of yet suggests that this debacle could continue. With that being said, it is still quite possible that funds could be retrieved from e.g. Bitfinex or Poloniex with their respective assistance. However, it is still unclear whether these exchanges have even been embroiled in this scandal or not.



