Report: Quadriga's 6 Cold Wallets Have Been Without Funds Since April 2018

Ernst & Young, the court-appointed monitor in the Quadrigacx saga, released a report on March 1 which shows that cold wallets known to have been used by the Canadian exchange have been without funds since April 2018. The latest twist adds some clarity to a mystery that has held Quadrigacx customers spellbound, hoodwinked into believing Gerald Cotten had supposedly died with the keys to their $190 million fortune.

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6 Empty Cold Wallets Identified

Accountants Ernst & Young identified six cold storage addresses used by Quadrigacx to store cryptocurrency in the past, the Toronto Star reported on March. 2. Five of those wallets have been empty since April 2018. The report detailed how a sixth wallet “appears to have been used to receive bitcoin from another cryptocurrency exchange account and subsequently transfer bitcoin to the Quadriga hot wallet” on Dec. 3.

The only other transaction, as disclosed last month, was when $371,000 worth of BTC was accidentally moved to a cold wallet – the sixth wallet – controlled by CEO Cotten, thought to have died in India in December.

According to a blockchain-based review of transactions of the six wallets from April 2014 to April 2018, aggregate BTC monthly balances in the identified cold wallets ranged from zero to a peak of 2,776 BTC, the article said. On average, aggregate month end balance amounted to about 124 BTC over the four-year period. Quadrigacx also appears to have moved some bitcoin to rival crypto exchanges. The report read:

The monitor has made inquiries of the applicants as to the reason for the lack of cryptocurrency reserves in the identified bitcoin cold wallets since April 2018. To date, the applicants have been unable to identify a reason why Quadriga may have stopped using the identified bitcoin cold wallets for deposits in April 2018, however, the monitor and management will continue to review the Quadriga database to obtain further information.

The Mystery Continues

The Quadrigacx saga has left more than 115,000 customers in the cold, unsure whether they will ever recover their combined $190 million in cryptocurrency, until now believed to have been buried together with Cotten. The company has been under court-approved creditor protection since Feb. 5, with Ernst & Young acting as monitor under the process.

Quadriga, run as a one-man operation by Gerald Cotten, using his laptop, officially ceased operations at the end of January. His widow Jennifer Robertson described Cotten’s normal procedures for transactions as moving “the majority of the coins to cold storage as a way to protect the coins from hacking or virtual theft,” as per the March. 1 report.

The Toronto Star reported that Ernst & Young has also identified another three cold wallet addresses that may have been used by Quadrigacx. Even though the said wallets do not contain any funds, the monitor is analyzing the history of their transactions.

Another 14 user accounts created outside the normal process were also identified, with deposits created and used for trading, stated the article. Ernst & Young has contacted the 14 exchanges involved with the accounts and received responses so far from four.

What do you think about the twists and turns at Quadrigacx? Let us know in the comments section below.

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