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The QuadrigaCX mess continues after a report from Ernst & Young has been filed with the Supreme Court of Nova Scotia. According to the report, the deceased owner of the Canadian cryptocurrency exchange was allegedly using funds from customers to secure his own margin trading on other platforms.

For those of you who were not aware of what had happened to QuadrigaCX, Gerald Cotten, the CEO and Co-Founder of the biggest cryptocurrency exchange in Canada, passed away due to complications arising from Crohn’s Disease. The 30-year-old entrepreneur shocked the cryptocurrency world and especially QuadrigaCX client base, given that Cotten was the only one with access to a crypto wallet that currently holds about $140 million in cryptocurrencies.

Shortly after, Ernst & Young (EY) was appointed as the monitor to perform an audit of the exchange and liquidate assets in order to pay creditors and customers of the crypto exchange. The investigation held by EY showed several concerns which apparently contributed to the current situation Quadriga and its users are facing. According to the report, the majority of the activities were directed by Mr. Cotten, with a segregation of duties and lack of basic internal controls; no account records were kept that could prove Quadriga’s profitability; the company engages in multiple cash transactions; security passwords associated with bank accounts, wallet addresses and third-party exchanges have not been located since they were held exclusively by Mr. Cotten, failing to ensure an adequate safeguard procedure for the transfer of said passwords and operating data in case of the sudden death of Mr. Cotten; cryptocurrencies were not maintained exclusively in Quadriga’s wallets, with significant volume of crypto transferred to other platforms owned by Mr. Cotten and traded on these exchanged affecting Quadriga’s Cryptocurrency reserves; additionally, Mr. Cotten created accounts under aliases with unsupported deposits used to trade within the platform resulted in inflated revenue figures, artificial trades and withdrawal of cryptos; and substantial funds were transferred to Mr. Cotten personally and other related parties.

This incredible list of “concerns” raised by Ernst & Young in its fifth report point out to a significant flaw system, which lacked financial reporting and operational control. Unfortunately for those who had funds in the cryptocurrency exchange, EY was unable to identify the identity of the third parties involved in said operations, which wallets currently hold significant sums of cryptocurrencies. As of today, about 76,000 users are owned a combination of fiat and crypto by Quadriga, with a total value of approximately $160 million.

The report also outlines that other exchanges allegedly received multiple forms of crypto from Quadriga wallets from 2016-19 including 9,450 bitcoin (BTC), 387,738 ether (ETH) and 239,020 litecoin (LTC). Still, over $80 million worth in bitcoin remains unaccounted for, having been sold through third parties. The cold wallets remain inaccessible, with Mr. Cotten being the only one who had access to them.