Exchange

One More Disaster For QuadrigaCX, Mistakenly Sends $500K in BTC to Cold Wallets

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A Canadian crypto exchange that is famous for all wrong reasons, QuadrigaCX was already getting its users frustrated because of its unaccessible cold wallets. Once again, the exchange platform has involved itself in new trouble, which can cost it a whopping $500,000 in Bitcoin (BTC).

Sadly, the exchange has lost another $500,000 as it has transferred the significant amount to its ‘widely known unaccessible cold wallets.’ As QuadrigaCX had filed for creditor protection, the court appointed the renowned firm Ernst and Young (EY) to monitor the exchange’s operations. In the report, EY gave details about the mistakenly sent funds. Notably, the exchange is going through all these severe problems due to the death of QuadrigaCX’s founder Gerald Cotten.

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The 30-year-old founder was the only one to know the private keys of cold wallets. Since December 2018, when the founder died, the exchange couldn’t access its cold wallets. The exchange already owes customers $250 million in CAD ($190 million U.S.) in cryptocurrencies and fiat. Another loss of $500,000 to cold wallets has increased the exchange’s troubles.

EY, the ‘Big Four’ audit firm issued a report named “First Report of the Monitor,” regarding this. It notes,

“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access. The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”

After all these, EY will be in charge of the Quadriga’s remaining hot wallet funds. It will transfer these hot wallets to the professional services firm’s cold wallets. In its hot wallets, Quadriga holds 51 Bitcoin, 0.014 Bitcoin Cash SV, 33 Bitcoin Cash, 2,000 Bitcoin Gold, 800 Litecoin and 950 Ether. Moreover, as part of the audit, Ernst & Young has taken control of some Quadriga’s electronic devices including four laptops, four cell phones, and three fully encrypted USB keys. Ernst & Young has secured these stuff in a safety deposit box rented by the auditing firm.

With that, Ernst and Young has submitted the monitoring report to the Supreme Court of Nova Scotia. EY also said that it is planning to get some third-party payment processors to get access to the exchange’s fiat balances. However, no movement regarding that has been observed.

Ruti Vora

Ruti regularly contributes in-depth news articles for leading cryptocurrencies. She contributes technical chart-based price updates and analysis pieces on world's leading digital currencies. She holds graduate degree in journalism.

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