According to several reports, some funds from the missing $150 million holdings of Canada’s biggest crypto exchange QuadrigaCX could be moving.

On Saturday, CCN.com reported that QuadrigaCX lost more than $190 million in funds stored in both crypto and fiat as the CEO, who had sole control over user funds passed away.

In a strange turn of events, some industry experts have expressed scepticism toward the case as wallets connected to the exchange’s hot wallets started to move.

Inconclusive Evidence, Not Definitive if it is QuadrigaCX’s Cold Wallets Containing Crypto

A Reddit user with an online alias “Palhello” studied all major wallets that interacted with the exchange’s hot wallet. The user discovered that several wallets have initiated transactions fairly recently after QuadrigCX’s case was publicized.

The user claimed that the four addresses evaluated in the research have been controlled by QuadrigaCX in the past.

“Any address that has input into the hot wallet are wallets that are fully in control of Quadriga (could also be an address that belongs to a Quadriga user whose private key belongs to Quadriga),” the user said.

The user added that regardless of the situation if the private keys held by the CEO were lost, the wallets should not be able to initiate outgoing transactions. The user said:

If these are really cold addresses there should be no outgoing transaction from them if private key is lost. Regardless, the addresses posted are or at least used to be controlled by Quadriga.

However, it cannot be said definitively that the four wallets which interacted with QuadrigaCX’s hot wallet are cold wallets.

These wallets could be big hot wallets owned by customers of the company or potentially wallets that are not under the control of QuadrigaCX.

Until the official investigation from the local police is complete, it will be difficult to prove that the wallets which interacted with QuadrigaCX’s hot wallet are the exchange’s cold wallets.

Skepticism

Jesse Powell, the CEO of Kraken, a major crypto exchange that operates in both the U.S. and Canada, said:

We have thousands of wallet addresses known to belong to QuadrigaCX and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if the Royal Canadian Mounted Police are looking into this, contact Kraken.

Peter Todd, a Bitcoin expert and an applied cryptography consultant, emphasized that until the investigation is complete, all possibilities have to be considered.

“The people trying to pull off a QuadrigaCX exit scam could actually be the family and other employees, by hiding the fact that the cold wallet keys are known. Not saying this is happening, but need to consider all possibilities fairly in the investigation,” Todd said.

It is entirely possible that the cold wallets of QuadrigaCX are currently not moving but rather wallets that were associated with the exchange previously, which are not related to the company, are becoming active again.

The time frame of the transactions have led analysts to become suspicious toward the case but there is not enough evidence to state that the cold wallets that were in control by the CEO, are moving.

The Situation Could Have Been Prevented

As said by Cornell professor Emin Gün Sirer, QuadrigaCX previously claimed to be using a multi-signature system.

A multi-signature system allows many organizations or individuals to hold private keys to a wallet and access it once the keys are combined.

A 3-5 or a 5-7 multi-signature system which requires the presence of the majority of keys to gain access to funds prevents unfortunate events from leading to the loss of user funds.

Quadriga previously claimed to have multisig wallets.https://t.co/3hsrLZw4ZY — Emin Gün Sirer (@el33th4xor) February 3, 2019

If the company had implemented a proper multi-signature system, $150 million in user funds would have remained safe.