Canadian crypto exchange QuadrigaCX is probably one of the most actively discussed crypto exchanges today. After its CEO unexpectedly died in December 2018, the hard times for the platform began. As it was claimed by the exchange’s representatives in January, nobody knew where to find the key to the cold wallets owned by Quadriga. As a result, an impressive amount of $150 million of users’ funds remained frozen.
But it was only the first part of the company’s troubles. In February, it occasionally sent more than 100 Bitcoins to the wallet that it doesn’t have access to. After such a misfortune, Ernst and Young (EY) that was appointed by the court as a monitor, took a decision to take control of the remaining hot wallet funds and to transfer them to its own cold storage.
Moreover, the experts of EY has also taken control of the electronic devices that were used by Gerald Cotton, CEO of QuadrigaCX, with a view to find an opportunity to get access to the customers’ funds, otherwise, the only way to compensate the exchange’s debts is to sell it.
Recently, EY has stated that according to the results of its research, the exchange’s cold wallets have remained empty since April 2018 and the platform hasn’t used it since that time.
Storing of ETH on External Platforms?
But even at this point, all the mysteries about Quadriga haven’t come to an end. Crypto research and consulting platform ZeroNonCense claimed that QuadrigaCX may have kept a large quantity of Ethereum in different crypto exchanges like Kraken, Bitfinex, and Poloniex. ZeroNonCense obtained this information from Jesse Powell who is Kraken CEO and Taylor Monahan, MyCrypto CEO.
According to the report, during its operating, QuadrigaCX has probably sent around 650,000 its Ethereum coins to other cryptocurrency exchanges’ storages. Though ZeroNonCense experts do not guarantee that this information is 100% correct, they highlight that there is a very strong possibility that Quadriga has chosen the three above-mentioned platforms as the most reliable storage options for its funds. The estimated total value of all the digital assets that were transferred by QuadrigaCX to other platforms is around $100 million.
Nevertheless, according to the affidavit of Jennifer Robertson who is Cotton’s widow, she didn’t know where her husband stored the crypto assets. Neither did other representatives of the exchange. That’s why it is highly possible that nobody of them was aware of Cotten’s storage strategy.
But at the same time, Robertson noted that Cotton could also use facilities of other crypto exchanges to store the funds of QuadigaCX. This fact could explained why the exchange didn’t use its cold wallets for quite a long time, as it has been revealed by EY.
ZeroNonCense has also made a conclusion that if QuadrigaCX’s funds are really securely kept on the external platforms, it won’t be a problem to get access to them. But it’s worth mentioning that this news may only boost Canadian banks concerns of the exchange participation in money laundering activities.