EY Says Quadriga’s Six Bitcoin Cold Wallets Stopped Being Used In April 2018


Ernst & Young (EY), one of the four largest audit firms in the world and which was appointed by the court as a monitor of the troubled QuadrigaCx cryptocurrency exchange, has discovered Bitcoin cold wallets that were last used in April 2018.

Empty Cold Wallets

While tabling its ‘Third Report of The Monitor’ in the Supreme Court of Nova Scotia, the audit firm indicated that the Bitcoin wallets were previously used as the main Bitcoin storage wallets. Shockingly, since April last year, the exchange has never deposited Bitcoins in the wallets which were empty when EY found them.

According to the report:

“The monitor [EY] has made inquiries of the applicants (QuadrigaCX) as to the reason for the lack of cryptocurrency reserves in the identified Bitcoin cold wallets since April 2018. To date, the applicants have been unable to identify a reason why Quadriga may have stopped using the identified Bitcoin cold wallets for deposits in April 2018.”

Troubles at the exchange started sprouting when users started having difficulties in withdrawing their funds. Later, the exchange’s founder, Gerald Cotton, who had sole access to the exchange’s cold wallets, was reported dead in India.

Early last month, the exchange filed for creditor protection at the Nova Scotia Supreme Court. A process to establish whether or not the exchange had cold wallets was started with the court, the exchange, and the audit firm involved.

Apart from the empty Bitcoin cold wallets, the report observed that:

“During interviews with the applicants’ representatives, the monitor was advised of fourteen user accounts that may have been created outside the normal process by Quadriga. It appears that the identified accounts were created under various aliases …[and they] were internally created without a corresponding customer and used to trade on the Quadriga platform.”

Amazon Web services which stores Quadriga’s account balance data has declined to offer any assistance since the cloud account is a personal account under Mr. Cotten’s name.

To help solve the mystery that surrounds the missing funds at Quadriga, Kraken, a crypto exchange, has offered $100,000 for anyone with information that may lead to the discovery of the funds.

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