QuadrigaCX Lost Another $500K in Bitcoin By Mistake: EY Report

QuadrigaCX lost another 100 bitcoin after transferring them to a cold wallet it previously said it cannot access.

AccessTimeIconFeb 12, 2019 at 9:15 p.m. UTC
Updated Sep 13, 2021 at 8:53 a.m. UTC

Canadian crypto exchange QuadrigaCX, which owes customers $250 million in CAD ($190 million U.S.) in cryptocurrencies and fiat, lost another $500,000 CAD by mistake last week.

In an initial report published Tuesday on Quadriga's progress since it filed for creditor protection in late January, court-appointed monitor Ernst and Young (EY) said that the company accidentally moved more than 100 bitcoins into a cold storage wallet it cannot access.

According to the report:

"On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 [CAD] to Quadriga 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."

The company previously said it was unable to access the cold wallets because its CEO Gerald Cotten, who died while traveling in India in December, was the only one who knew where the private keys were.

EY will take control of the exchange's remaining hot wallet funds by transferring the cryptocurrencies into the professional services firm's own cold wallet, according to Tuesday's report.

This includes 51 bitcoin, 0.014 bitcoin cash SV, 33 bitcoin cash, 2,000 bitcoin gold, 800 litecoin and 950 ether.

EY did not immediately respond to an email asking for the wallet addresses involved.

Devices impounded

According to the report, EY has also taken control of "various Quadriga electronic devices reportedly owned or used by [former CEO Gerald] Cotten within the Quadriga operation," including four laptops, four cell phones and three encrypted USB keys.

These devices are being kept in a safety deposit box EY rented while its forensic group determines the best next steps to try to access them.

EY also said it was working with some third-party payment processors to unlock the exchange's fiat balances, though it has not made any substantive progress to date.

Quadriga disclosed in a previous court filing that it owed its customers $180 million CAD ($137 million USD) in cryptocurrencies, but did not provide a breakdown between the funds held in hot wallets and those held in cold storage.

Tuesday's filing indicates that at the time, the exchange held $902,743 CAD ($682,000 USD) in its hot wallets, meaning it had $179 million CAD (about $136 million USD) in cold storage.

Anna Baydakova contributed reporting.

Frozen bitcoin image via Shutterstock


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