The high-profile search for $190 million in missing cryptocurrency owed to users of the beleaguered QuadrigaCX trading platform has turned up a small amount of digital assets, but the intrigue surrounding the case deepened Friday as investigators pointed to a series of transactions they can’t explain. (AP Photo/Kin Cheung, File)

Search into missing cryptocurrency from B.C.-based exchange turns up empty ‘cold wallets:’ Report

QuadrigaCX users owed nearly $260 million in cash and crypto-coins

The high-profile search for $190 million in missing cryptocurrency owed to users of the beleaguered QuadrigaCX trading platform has turned up a small amount of digital assets, but the intrigue surrounding the case deepened Friday as investigators pointed to a series of transactions they can’t explain.

A report released late Friday by court-appointed monitor Ernst and Young, which is overseeing the creditor protection process for the insolvent trading platform, offered few answers for the firm’s users — owed nearly $260 million in cash and crypto-coins.

READ MORE: Okanagan Kelowna connection to dead cryptocurrency exchange CEO

The monitor’s third report indicated six so-called cold wallets used to store digital assets offline have been found, but all of them are empty.

The report said there have been no deposits since April in five of those wallets — besides one recent inadvertent transfer — while a sixth wallet appears to have been used more recently, the report said.

The monitor said QuadrigaCX and its affiliated companies were unable to explain why the cold wallets haven’t been used in several months.

“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,” George Kinsman, senior vice-president with Ernst and Young, said in the report.

“However, the monitor and management will continue to review the Quadriga database to obtain further information.”

Meanwhile, the monitor confirmed it had also became aware of three other potential cold wallets, but they were also empty.

The monitor also found 14 user accounts on the QuadrigaCX platform that were “created outside the normal process,” using a number of aliases.

More importantly, the accounts were created internally “without a corresponding customers and used to trade on the Quadriga platform,” the monitor reported.

“The monitor was further advised that deposits into certain of the … accounts may have been artificially created and subsequently used for trading on the Quadriga platform.”

Transaction data indicates there was a significant volume of activity associated with these accounts, including withdrawals of cryptocurrency to wallet addresses not associated with Quadriga, the report says.

The monitor said it remains unclear how the accounts were used and whether the recipients of the withdrawals can be identified.

Meanwhile, the monitor has been trying to secure data from the trading platform that includes information about account balances and transactions. That information is stored in the cloud with Amazon Web Services Inc. (AWS), but the monitor has not been able to gain access to that data because the contract was in the name of the company’s late co-founder, Gerald Cotten.

Court documents say Cotten had sole control of encrypted passcodes required to gain access to the company’s offline digital assets.

“AWS has indicated that it is unable to provide the monitor with access to the AWS account to permit a copy of the data … to be secured,” the monitor said, adding that consent from Cotten’s widow, Jennifer Robertson, was not enough for Amazon.

As a result, the monitor plans to ask Nova Scotia Supreme Court Justice Michael Wood to step in.

Brett Bundale and Michael MacDonald, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Northwest mobile unit to help those at heart of mental health, addiction crisis

Province, Northern Health unveils new unit in Terrace to bridge gaps in services

Aussies buy majority stake in Red Chris mine

Company looks forward to relationship with Tahltan Nation

B.C. First Nations’ intake of essential nutrients to drop by 31 per cent: study

Professors project the nutrient decrease by 2050 if climate change mitigation continues as is

B.C. minister says rural internet is ‘railroad of the 21st century’

Jinny Sims talks details about the $50-million provincial and possible $750-million federal funds

CityWest to reopen its Kitimat office

The company anticipates growth in demand for services with LNG Canada’s project

Truck driver in fatal Broncos crash sentenced to eight years

Judge Inez Cardinal told court in Melfort, Sask., that Sidhu’s remorse and guilty plea were mitigating factors

B.C. fire department offers tips to keep your home safe during wildfire season

With wildfire season getting closer, the Penticton Fire Dept. offer tips to keep your home safe

Fierce feline spotted as ‘aggressor’ in face off with coyote in B.C. backyard

North Vancouver resident Norm Lee captures orange cat versus coyote in backyard showdown

Wilson-Raybould to reveal more details, documents on SNC-Lavalin affair

Former attorney general has written to the House of Commons justice committee

Anti-discrimination group wants to map offenders with cross-Canada hate atlas

Morgane Oger Foundation issues call for volunteers to help build Canadian Atlas of Populist Extremism

Kater to launch ridesharing service in Vancouver by end of month

The Surrey-based company got its permits from the Vancouver Taxi Association

Second case of measles reported in the B.C. Interior

Case is connected to an earlier measles case in 100 Mile House

Cheetahs will not prosper in Creston: Permit rejected for two big cats

Earl Pfeifer owns two cheetahs, one of which escaped in December 2015

Most Read