Thursday March 07, 2019

Quadriga Cryptocurrency Wallets are Empty

When Quadriga's CEO, Gerald Cotten, died in late 2018, the cryptocurrency exchange lost access to millions of dollars of cryptocurrency locked away in cold storage. His window claimed that the funds would be inaccessible unless a password or recovery key was found, but according to recent reports, those funds were never there in the first place. Ernst & Young, who were appointed to the role of monitor by the Supreme Court of Nova Scotia, says that six of the "cold wallets" were emptied months before the CEO's death, and that one of the wallets stayed in use to receive Bitcoin from another exchange. They've encountered a number of other inconsistencies and roadblocks in their subsequent investigation, and now some online communities are even speculating that the CEO faked his own death in India. Thanks to Guarana [BAWLS] for the tip.

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When the monitor asked Quadriga's remaining representatives why the company had stopped depositing bitcoin into its cold wallets last spring, they were unable to name a reason. Ernst & Young says it's researching any external accounts Quadriga might have had on other exchanges.In another unsettling detail, Ernst & Young also learned that 14 user accounts had been "created outside the normal process by Quadriga," apparently using aliases and bogus funding... Speculation about what happened to Quadriga's bitcoin holdings has now reached a fever pitch. Even before Ernst & Young concluded that wallets that were purported to be Quadriga's key bitcoin reserve were actually empty, Canada's Globe and Mail newspaper published a story last week asserting that Quadriga co-founder Michael Patryn has used an alias to cover up his true identity as "a convicted felon who served time in the United States for his role in an online identity-theft ring."