QuadrigaCX ‘Inadvertently’ Sent Bitcoin to Dead CEO’s Wallet: EY Report

Cornelia Mascio
Febbraio 14, 2019

According to an initial report published on February 12, last week the failed crypto exchange accidentally moved more than 100 Bitcoins into a cold storage wallet they can not access. If you're not sitting down, I'd find a chair, because against all odds, Gerry Cotten, the exchange's dead owner, just got almost 500,000 Canadian dollars (CAD) richer.

QuadrigaCX, once the largest and longest-running Canadian crypto exchange, owes customers $250 million in CAD ($190 million USD) in cryptocurrencies and fiat money, in what has become the crypto scandal of the year.

Many had expected that the keys to the cold wallets would be found on the encrypted laptop already in the court's possession.

EY will take control of the exchange's remaining hot wallet funds by transferring the cryptocurrencies into the professional services firm's own cold wallet, according to Tuesday's report.

On December 9, 2018, CEO of QuadricaCX Gerald Cotten died in India from Crohn's disease at the age of 30...

However, on February 6, - the day after the exchange was given 30 days to find a way into their cold wallets - 103 of the 154 bitcoins stored in hot wallets were "inadvertently transferred ... to Quadriga cold wallets which the Company is now unable to access". In other words, approximately CAD$468,675 worth of bitcoin was accidentally moved to the inaccessible cold wallet supposedly controlled by the deceased owner. Let us know what you think in the comment section below.

All right. Back to the rest of the report.

The report continues, "The monitor is working with [QuadrigaCX] management to retrieve this cryptocurrency from the various cold wallets, if possible".

The Canadian court that has placed QuadrigaCX into administration has been handed "two active laptops, two older model laptops, two active cellphones, two dead cellphones and three encrypted USB flash drives", and will also seek to seize a desktop device from Cotten's home office. As of late, the devices are being held in a safety deposit box until EY's forensic team determines how they will attempt to access them.

At the end of last week, Reuters reported that the British Columbia Securities Commission, the province's securities regulator, would not be investigating the QuadrigaCX situation as the authority did not believe the exchange was trading in securities.

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