Bitcoin News

Bitcoins Tied to QuadrigaCX Transferred Out of Cold Wallet

On-chain detective ZachXBT says that five wallets linked to the now-defunct Canadian exchange QuadrigaCX moved 104 Bitcoins for the first time in years on December 17.

Early in 2019, the exchange’s court-appointed monitor, Ernst & Young (EY), said that 103 BTC were sent by mistake to cold wallets that can’t be accessed.

Note that EY is not in charge of moving the money. Coindesk says that bankruptcy inspectors are working to find out more about the coins that were recently transferred.

QuadrigaCX was a cryptocurrency exchange in Canada, and it was the biggest in the country. It started doing business in 2013, letting people trade cryptocurrencies like Bitcoin, Ethereum, Litecoin, and more.

In December 2018, QuadrigaCX suddenly shut down because of sudden problems with running the business caused by the sudden death of its founder and CEO, Gerald Cotten. Soon, word got out that nearly CA$200 million that belonged to customers had disappeared. It seems that Cotten had kept control of all user funds outside of the company’s exchange platform so that hackers and other possible bad actors couldn’t get to them.

When he died suddenly in India on his honeymoon from Crohn’s disease, he took the keys to these accounts with him. When officials looked through Cotten’s computer, they found that he had been mishandling client funds and moving large amounts of money into his own accounts instead of keeping them in cold storage wallets as company policy required. As a result, it came out that there was only about CA$26 million left in QuadrigaCX wallets going into 2019. This was much less than what customers had originally put in, so the exchange was unable to pay its bills.

The failed exchange filed for bankruptcy protection soon after it closed. The investigation into Quadriga CX was only able to get back a small amount of the money. 


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