QuadrigaCX's Cold Storage Wallets Have Been Empty Since April: Report

The embattled cryptocurrency exchange QuadrigaCX, which has claimed to be locked out of $145 million worth of crypto in cold storage, seemingly doesn’t have the funds, as a court-appointed monitor, Ernst and Young, found six empty cold storage wallets.

According to a report the monitor published, five of these wallets have been empty since April of last year, and have only received an inadvertent transfer recently. The last one was reportedly used more recently. QuadrigaCX and its affiliated companies, Ernst and Young’s report reads, weren’t able to explain why these wallets haven’t been used for months.

George Kinsman, the firm’s senior vice-president, said in the document:

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.

Kinsman added the firm will keep on looking into QuadrigaCX’s database to clarify the situation. It also confirmed it’s aware of three other potential cold wallets the exchange had – that are also empty.

As CryptoGlobe covered, Canadian banks are wary of handling QuadrigaCX’s funds, over concerns some of them may have been used in illicit activities. The exchange’s situation has cost one crypto enthusiast his $420,000 life savings.

14 Accounts “Created Outside The Normal Process”

Notably, Ernst and Young also found there were 14 accounts on QuadrigaCX that had been “created outside the normal process.” These accounts, according to the report, apparently received “artificially created” deposits, with funds that were then used to trade on the embattled cryptocurrency exchange.

Data, in fact, shows there was a significant volume associated with these accounts, which have withdrawn funds to cryptocurrency wallet addresses not associated with the Canadian exchange itself. Whether it’s possible to identify these accounts or the withdrawals’ recipients is unclear.

QuadrigaCX’s data is seemingly also locked away, as information about account balances, transactions, and more was stored in the cloud with Amazon Web Services (AWS). Ernst and Young has so far not been able to access the data, as permission from Jennifer Robertson, the widow of the exchange’s late co-founder Gerald Cotten, wasn’t enough for the firm.

To get to it, the monitor is reportedly going to ask Nova Scotia Supreme court Justice Michael Wood to step in. Currently, Ernst and Young has managed to recover over $20 million in cash, held by third-party processors. The amount of cryptocurrency recovered is said to be minimal, and the amount QuadrigaCX still had has been sent to the monitor