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Quadriga CEO Death – Funds Moved From ‘Lost’ Cold Wallets

A company with legal problems; a mysterious death; missing customer funds. The QuadrigaCX story could have come straight from the pen of a hack Hollywood writer. Well now, the internet’s faithful crypto-investigators, claim to have found evidence of transactions initiated from the supposedly ‘lost’ cold wallets. The Litecoin wallets, at least.


Let’s Start With a Quick Recap

QuadrigaCX is Canada’s largest cryptocurrency exchange, although it has just filed for creditor protection, following months of transaction delays. Customers are naturally concerned about their funds, as all assets are temporarily frozen… supposedly.

Problems for the company started in January 2018, when the Canadian Imperial Bank of Commerce (CIBC) froze CA$26 million in assets. According to the bank, CA$67 million worth of transactions wrongly ended up in the payment processor (Costodian Inc)’s personal account. This legal action dragged on until 3rd December 2018, when a judge ordered the release of the funds.

December then saw a string of promises from Quadriga that the money was coming, following confirmation on Christmas Day that they had received the funds… followed by more promises, then the announcement on 14th Jan 2019, that their CEO, Gerald Cotten, had died in India, on 9th Dec 2018.

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Dead Men Keep Private Keys Secret

Unfortunately, explained Quadriga, and Cotten’s wife, Jennifer Robertson, the $250 million worth of cryptocurrency of customer funds is stored in cold wallets are not recoverable as only her dead husband knew the private keys.

Naturally, the tinfoil-hat brigade didn’t believe this and even suggested that Mr Cotten was, perhaps, not entirely dead. It is claimed that he died of complications surrounding Crohn’s disease while working at an orphanage.

Even Jesse Powell of Kraken questioned the legitimacy of the story and offered to help the police with any inquiries.

Dead Men Don’t Move Funds

When the internet gets to work, the internet gets to work. Several sleuths posted ‘evidence’ of discrepancies in the official line.

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On Reddit, someone claimed to have found Quadriga’s Litecoin cold wallet addresses, and that funds were being moved out. Commenters were eager to see this as proof the death was just an exit-scam until somebody pointed out that, it was at least equally likely that the person who had taken control of the keys simply didn’t want to share the funds.

A separate investigation into the company’s bitcoin holdings suggested that there were no cold wallet reserves. It identified several discrepancies in the official story and said that QuadrigaCX does not appear to have lost control of their bitcoin holdings.

The investigation also claimed to prove that Quadriga ran a fractional reserve. To which the internet replied… Meh, probably. But some of your assumptions are questionable.

It’s likely to be some time before we know anything for sure.

Do you think the CEO isn’t dead after all? Share your thoughts below!


Images courtesy of Shutterstock

The post Quadriga CEO Death – Funds Moved From ‘Lost’ Cold Wallets appeared first on Bitcoinist.com.

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