QuadrigaCX co-founder transferred user funds for his own margin trading

QuadrigaCX co-founder transferred user funds for his own margin trading

QuadrigaCX co-founder transferred user funds for his own margin trading

Failed Canadian exchange Quadriga CX was seemingly a fraudulent crypto exchange and does not even "provide any visibility into whether Quadriga was operating profitably or not", according to the latest report from the QuadrigaCX CCAA (the Companies' Creditors Arrangement Act) monitor. He used some the crypto as a security for margin trading accounts he himself established on other exchanges.

This incredible list of "concerns" raised by Ernst & Young in its fifth report point out to a significant flaw system, which lacked financial reporting and operational control.

In addition to most of the activities being directed by a single individual - the now-deceased co-founder Gerald Cotton - EY notes that there was neither segregation between duties and basic internal controls, nor any segregation of assets between Quadriga's and user funds.

Cotten ran Quadriga largely from his computer, and his unexpected death in December whereas travelling in India threw the industry into disarray.

Between 2016-29, Cotten transferred 9,450 Bitcoin (BTC), 387,738, Ether (ETH) and 239,020 Litecoin (LTC) out of exchange's accounts. Quadriga's cryptocurrency reserves were "adversely affected" by trading losses and incremental fees charged by other exchanges, the report said.

Bear falls asleep in wardrobe after entering home
Authorities said they hoped the bear would hop down from the shelf he was on and leave, but that didn't happen. That's when authorities say the bear climbed to the top shelf of the closet and took a "nap".

At the Filing Date, the report says, approximately 76,000 users were owed a combination of fiat and cryptocurrency by the exchange, including nearly Dollars 5.5 million and close to CAD 67 million, 26,295 BTC, 122,743 Litecoin, 89,924 Ethereum, etc.

E&Y's blockchain analysis further stated that the 5.6 BTC were transferred to wallet addresses controlled by Cotten, as well as a sum of 1,426.2 BTC, which were sent from the aforementioned Exchange Accounts to wallet addresses which the monitor has no information about.

Cotten is also said to have created accounts under aliases allegedly "Unsupported Deposits were deposited and used to trade within the Platform resulting in inflated revenue figures, artificial trades with Users and ultimately the withdrawal of Cryptocurrency deposited by Users". And "substantial funds" were transferred to Cotten personally and other related parties. That epic was enviornment to huge charges and generated huge losses. Based on the transaction details obtained, 21,501 BTC were deposited with the third exchange in an account under the name of Gerald Cotten. Ernst & Young's investigation suggests that at least some of that Bitcoin came from Quadriga, though it's unclear exactly how much.

Ernst & Young also updated the amount owed to QuadrigaCX users, to $74.1 million in cash and $140.5 million in cryptocurrency. Court filings from January initially estimated epic holders had $70 million in money balances and $190 million in cryptocurrency.

Recommended News

  • Navy SEAL reveals on stand he killed prisoner, not chief

    Navy SEAL reveals on stand he killed prisoner, not chief

    They accuse disgruntled SEALs of lying to prevent him from being promoted because they did not like his demanding leadership. Defense lawyers say Gallagher treated the prisoner for a collapsed lung suffered in a blast from an air strike.
    Voice-activated Monopoly tells players: 'You're bankrupt!'

    Voice-activated Monopoly tells players: 'You're bankrupt!'

    When you need to pay rent or collect a card, press a button on the device and humbly speak to the diminutive penny-pincher. Having been around for 84 years at this point, Monopoly is a game that's gone through a large number of variations.
    Nokia 3.2 arrives in the United Kingdom , promising a two-day battery life

    Nokia 3.2 arrives in the United Kingdom , promising a two-day battery life

    Starting at less than $150, this is one of the most affordable devices you will get for the specs it brings on board. Alternatively, you can also tap on the Settings menu to manually check for the presence of the update.
  • World number one, Osaka out of Birmingham

    World number one, Osaka out of Birmingham

    The Birmingham Nature Valley Classic is one of several grass-court tournaments taking place before Wimbledon begins on 1 July. Julia Goerges is next up for Putintseva after the 2018 Wimbledon semi-finalist defeated Russia's Evgeniya Rodina 6-4, 6-3.
    Iran Threat Remains High as Iranian Cyber Attacks Continue Against US

    Iran Threat Remains High as Iranian Cyber Attacks Continue Against US

    " Iran will firmly confront any aggression or threat by America", foreign ministry spokesman Abbas Mousavi told Tasnim. He also said Iran itself had shown restraint, opting not take shoot down another US plane, sparing American lives.
    Juventus 'close in on signing of £62m Matthijs de Ligt'

    Juventus 'close in on signing of £62m Matthijs de Ligt'

    With Pique, Lenglet, Umtiti and Todibo competing for spots at Barcelona , that is a luxury the Catalan club can not offer. De Ligt is currency on holiday in Miami - and the defender will make a decision on his future in the coming days.
  • Donald Trump Denounces Sexual Assault Accusation from E. Jean Carroll

    Donald Trump Denounces Sexual Assault Accusation from E. Jean Carroll

    Carroll claims that she fought off Trump before she was able to flee from the dressing room and out of the store. Carroll has said that the rape happened in a Bergdorf Goodman changing room, in NY , in the mid 1990s.
    Bank of England warns increased downside risks as bank rate held

    Bank of England warns increased downside risks as bank rate held

    Being on track has enabled the Bank to keep rates frozen and not have to raise rates to maintain a grip on prices. The Bank reiterated that rates will rise "at a gradual pace and to a limited extent", adding that the economic.
    MI  man who won $80M jackpot during divorce must split lottery winnings

    MI man who won $80M jackpot during divorce must split lottery winnings

    After taxes and deductions, Rich Zelasko's Mega Millions winnings amounted to $38,873,628, according to court documents . Their divorce was finalized in 2018, the Free Press reports .
  • Oklahoma gets commitment from 5-star 2021 QB Brock Vandagriff

    Oklahoma gets commitment from 5-star 2021 QB Brock Vandagriff

    Friday, Edgerrin Cooper officially came aboard Oklahoma's 2020 class, announcing on Twitter that he was committed to the Sooners. Brock Vandegriff is the No. 1 quarterback in his class and is now ranked the top overall prospect according to Rivals.
    Brees awarded $6M in diamond-fraud lawsuit

    Brees awarded $6M in diamond-fraud lawsuit

    Last season, Brees set the career passing-yardage record for National Football League quarterbacks. "It was our position that Mr. A San Diego Court has awarded Saints quarterback Drew Brees and his wife $6.1 million in a lawsuit against a jeweler.
    Trump to nominate Mark Esper to be next defense secretary

    Trump to nominate Mark Esper to be next defense secretary

    He most recently served as Lockheed's vice president of sustainment for the F-35 Lightning II fighter jet program. He also has experience as a national security adviser on Capitol Hill as well as a defense industry lobbyist.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.