The conspiracy theory surrounding QuadrigaCX began with the December 9, 2018, death of the exchange’s CEO. Chief Executive Officer (CEO), Gerald Cotton, took the only private keys to the grave, depriving users of $190 million in frozen funds.
Since then, an additional $468,675 in bitcoin was accidentally transferred to the crypto exchange’s inaccessible cold wallets early this month.
Court Appointed Overseer
While releasing their first report on February 12, 2019, Ernst & Young, the court-appointed monitor for the embattled QuadrigaCX Cryptocurrency exchange, unveiled the shocking details. In the report, Ernst & Young reported that the exchange “inadvertently” transferred $468,675 in bitcoin to a cold wallet whose private keys were only known by the now deceased CEO Gerald Cotton.
The report of the monitor read:
“On February 6, 2019, QuadrigaCX inadvertently transferred 103 Bitcoins valued at approximately $468,675 to QuadrigaCX cold wallets which the Company is currently unable to access […] the Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”
Locked Inside Cold Wallets
When Cotton died, he took with him six feet under the only way anyone could access the company’s secure and un-hackable offline storage units. Being the only person who had access to the private keys for the wallets, there is at least $190 million in bitcoin that owners have not been able to access for several months now.
By the time Canadian-based crypto exchange was shut down on January 28, 2019, there were close to 115,000 customers who kept their crypto assets in the exchange and were still owed at least $70 million in cash and $190 million in cryptocurrencies.
The exchange was shut over one month after its CEO died in India and left the company without access to the cryptocurrency cold wallets. Widow Jennifer Robertson told the Nova Scotia court that her husband was the only person with access to the laptop that she believes contained the private keys to the cold wallet.
Much suspicion has developed in the QuadrigaCX saga, and the explanation about the apparent loss of $190 million has only intensified research into finding sufficient evidence that the cold wallets existed, which, according to the monitor, are yet to be located. When the QuadrigaCX story emerged, it was so unbelievable the CEO of Kraken, a leading cryptocurrency exchange tweeted to say it was “bizarre and, frankly unbelievable.”