The high-profile search for $190 million in missing cryptocurrency owed to users of the beleaguered QuadrigaCX trading platform has turned up a small amount of digital assets, but the intrigue surrounding the case deepened Friday as investigators pointed to a series of transactions they can’t explain. (AP Photo/Kin Cheung, File)

Search into missing cryptocurrency from B.C.-based exchange turns up empty ‘cold wallets:’ Report

QuadrigaCX users owed nearly $260 million in cash and crypto-coins

The high-profile search for $190 million in missing cryptocurrency owed to users of the beleaguered QuadrigaCX trading platform has turned up a small amount of digital assets, but the intrigue surrounding the case deepened Friday as investigators pointed to a series of transactions they can’t explain.

A report released late Friday by court-appointed monitor Ernst and Young, which is overseeing the creditor protection process for the insolvent trading platform, offered few answers for the firm’s users — owed nearly $260 million in cash and crypto-coins.

READ MORE: Okanagan Kelowna connection to dead cryptocurrency exchange CEO

The monitor’s third report indicated six so-called cold wallets used to store digital assets offline have been found, but all of them are empty.

The report said there have been no deposits since April in five of those wallets — besides one recent inadvertent transfer — while a sixth wallet appears to have been used more recently, the report said.

The monitor said QuadrigaCX and its affiliated companies were unable to explain why the cold wallets haven’t been used in several months.

“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,” George Kinsman, senior vice-president with Ernst and Young, said in the report.

“However, the monitor and management will continue to review the Quadriga database to obtain further information.”

Meanwhile, the monitor confirmed it had also became aware of three other potential cold wallets, but they were also empty.

The monitor also found 14 user accounts on the QuadrigaCX platform that were “created outside the normal process,” using a number of aliases.

More importantly, the accounts were created internally “without a corresponding customers and used to trade on the Quadriga platform,” the monitor reported.

“The monitor was further advised that deposits into certain of the … accounts may have been artificially created and subsequently used for trading on the Quadriga platform.”

Transaction data indicates there was a significant volume of activity associated with these accounts, including withdrawals of cryptocurrency to wallet addresses not associated with Quadriga, the report says.

The monitor said it remains unclear how the accounts were used and whether the recipients of the withdrawals can be identified.

Meanwhile, the monitor has been trying to secure data from the trading platform that includes information about account balances and transactions. That information is stored in the cloud with Amazon Web Services Inc. (AWS), but the monitor has not been able to gain access to that data because the contract was in the name of the company’s late co-founder, Gerald Cotten.

Court documents say Cotten had sole control of encrypted passcodes required to gain access to the company’s offline digital assets.

“AWS has indicated that it is unable to provide the monitor with access to the AWS account to permit a copy of the data … to be secured,” the monitor said, adding that consent from Cotten’s widow, Jennifer Robertson, was not enough for Amazon.

As a result, the monitor plans to ask Nova Scotia Supreme Court Justice Michael Wood to step in.

Brett Bundale and Michael MacDonald, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

PHOTO: Chilliwack photographer captures incredible image of Comet Neowise

Comet that’s visible to the naked eye will be easiest to see on July 23

Upper Fraser Valley RCMP re-open community policing offices

CPOs have been closed for weeks in response to the COVID-19 pandemic, but re-opened Tuesday

PHOTOS: Sunbathers soak up the warm weather at Cultus Lake Park

Temperatures reached a high of 25 degrees celsius on Tuesday, marking the hottest day of July so far

RCMP ask for assistance to find missing Chilliwack man

Raymond Gene Jarvis has been missing since early July

Popkum fire chief urges caution after Saturday rescue from Bridal Veil Falls

11-year-old boy was stable, fire chief Walter Roos said, when delivered to a waiting ambulance

Recent surge in COVID-19 cases not unexpected amid Phase Three of reopening: B.C.’s top doc

Keep circles small, wear masks and be aware of symptoms, Dr. Bonnie Henry says

Thousands of dollars of stolen rice traced to Langley warehouse

Police raid seizes $75,000 in ‘commercial scale’ theft case

UPDATE: Mission spray park closed after children suffer swollen eyes, burns

Mission RCMP are investigating incident that injured several children

B.C. NDP changing WorkSafeBC regulations to respond to COVID-19

Employers say reclassifying coronavirus could be ‘ruinous’

Baby raccoon rescued from 10-foot deep drainage pipe on Vancouver Island

‘Its cries were loud, pitiful and heartbreaking,’ Saanich animal control officer says

Statistical flaws led to B.C. wolf cull which didn’t save endangered caribou as estimated

Study finds statistical flaws in an influential 2019 report supporting a wolf cull

Surrey’s first Ethics Commissioner brings ‘objectivity’ to the job

Vancouver lawyer Reece Harding is Surrey’s first Ethics Commissioner, also a first for B.C.

Windows broken, racist graffiti left on Okanagan home

Family says nothing like this has happened since they moved to Summerland in 1980s

19 times on 19th birthday: Langley teen goes from crutches to conquering Abby Grind

Kaden Van Buren started at midnight on Saturday. By 3 p.m. he had completed the trek 19 times.

Most Read