QuadrigaCX Funds May Not Be Missing After All: Report

Nearly two months after the death of Gerry Cotten, the Chief Executive Officer (CEO) of QuadrigaCX , the storm refuses to die down. Earlier, people were not convinced about the death and were convinced that there was something that the exchange was hiding.

However, after news outlets, (both Indian and international) published the death certificate as well as the Indian hospital’s statement on the matter, people have turned their attention to the ‘stuck’ cryptocurrencies in the exchange’s wallet.

To be fair, the reason for people’s suspicion was chiefly because Cotten had signed a will 12 days before his death, and everything had been left to his wife. Apart from that, a statement put out on social media said that the keys to the exchange’s wallet were only with the CEO and nobody else.

However, an analysis on a blogpost called Zerononcense busts open several myths. Some of the findings include: It appears that there are no identifiable cold wallet reserves for QuadrigaCX, It appears that QuadrigaCX was using deposits from their customers to pay other customers once they requested their withdrawal.

An important finding said, “It does not appear that QuadrigaCX has lost access to their Bitcoin holdings.”

After intense research, QuadrigaCX’s main ‘hot’ clustered wallet address was determined to be 000009200775868e, by the author. The finding was further reinforced when it emerged that dozens of customers had provided transaction information from 100 Bitcoin transaction IDs, deposit and withdrawal wallet addresses altogether. Each one of the wallets listed above were either directly sent to the cluster address or had at least part of the deposited funds sent to the cluster address at some point in time.

The report notes that the beginning number of the wallet addresses (‘3’) denoted that the wallets used by QuadrigaCX all had multi-signature capability, but it was unknown if the security feature was ever implemented.

The author further states that QuadrigaCX did not have a designated hot or cold wallet to send the customer their funds. In specific, they were forced to aggregate funds from disparate, disorganized locations in order to ensure that the withdrawal was successful.

The statement about Gerry Cotten’s death serves as chilling proof that was lying right in front of our eyes and we missed it. The statement had said, “For the past weeks, we have worked extensively to address our liquidity issues, which include locating our very significant cryptocurrency reserves held in cold wallets required to satisfy customer cryptocurrency balances on deposit and sourcing a financial institution to accept the bank drafts being transferred to us. Unfortunately, these efforts have not been successful. Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.”

Nowhere does this statement says that they do not have keys to the reserve wallets, so where did that statement originate from? As earlier reported, it was attributed to his wife, which means that she probably lied in her affidavit.

This report is only the tip of the iceberg and it is anybody’s guess if customers will ever receive their funds.

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