$100 Million Short: QuadrigaCX Audit Can’t Account for 26K Missing Bitcoin

QuadrigaCX

QuadrigaCX

Even though most of the particulars in their report were already known (e.g. getting onboard 3rd party payment processors to transfer the fiat to Quadriga wallets), EY refuses to offer any information when it comes to their efforts on searching for the missing cryptos.

Ernst & Young Inc. filed its third report on Friday since Quadriga Fintech Solutions Corp., which operated the trading platform, filed for creditor protection in January.

Since the untimely death of its founder, Gerald Cotten, the exchange's operations have been in limbo. 14 exchanges where these accounts are held have been contacted and only four have responded.

As also reported by FX Street, a research report was able to track down 600,000 Ethers lost by QuadrigaCX.

BTCNN on February 9, informed that the between December 2 and December 8, nearly $1 million worth of Ethereum was transferred from the QuadrigaCX to other exchanges.

These 14 accounts had been created from within the company, with no corresponding customers. The report noted that deposits had been made into these accounts, which had subsequently been used for trading on the exchange's platform.

The funds are reportedly spread across 12 wallets, and it's speculated that Quadriga's late CEO Gerald Cotten had such large amounts on these exchanges has he was using them to store his own platform's funds.

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The monitor said it remains unclear how the accounts were used and whether the recipients of the withdrawals can be identified. It has been discovered that there have been no deposits in the wallets since April 2018.

The monitor said that some of the bitcoin in the six empty wallets appears to have been transferred to other cryptocurrency exchanges. The report also said that the Bitcoins in the Identified Bitcoin Cold Wallets were transferred out completely in April 2018. "The Platform Data will assist the Monitor's ongoing investigation into Quadriga's business, affairs and potential assets that may be recoverable for the benefit of the Applicants' stakeholders", the report said. EY is yet to determine who is depositing the funds to QuadrigaCX's hot wallets.

The report said Ernst & Young has released $60,958.64 to Mr. Reyes, who claimed it was his personal funds. The company has been under court-approved creditor protection since February 5, with Ernst & Young acting as monitor under the process.

Another $5.8 million tied up in other bank drafts will be recovered once a corporate entity is restored to handle the transaction, the report says.

Ernst & Young also tried to get the account balance as well as transaction data about Quadriga which had been stored on Amazon Web Services' cloud.

"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. Ernst & Young is asking for a court order to resolve the issue.

On the other hand, Miller Thomson and Cox & Palmer, the two Canadian law firms appointed as representative counsel to represent the exchange's creditors, are requesting that only a 30-day extension be granted, as well as the right to amend or vary the initial order.

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