A strange twist in the story of the missing funds of the QuadrigaCX exchange: the cold storage wallets that belonged to the deceased CEO of the exchange, Gerald Cotten, are all empty.

On March 1, audit firm Ernst & Young (EY) released its third report with more information on the missing funds of the Canadian crypto exchange QuadrigaCX. The findings are not what many people were expecting.

According to the report, EY identified six separate crypto cold storage wallets that were used primarily to store Bitcoin. Besides one inadvertent transaction of Bitcoin amounting to nearly $500,000 last year, no deposits have been made to in the wallets since April 2018.

EY states in the report:

“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, however, the Monitor and Management will continue to review the Quadriga database to obtain further information.”

Strange, to say the least, is that after the death of QuadrigaCX founder Gerald Cotten, the team of QuadrigaCX reported that it had lost access to the cold wallets and corresponding keys. Therefore, the crypto exchange no longer had access to the Bitcoin owned by various clients. Therefore, it is strange that the cold wallets of the founder are most likely empty.

Today’s report also states that EY discovered that 14 user accounts that “may have been created outside the normal process by Quadriga” and that “[i]t appears that the Identified Accounts were created under various aliases.” According to the report:

“…the Identified Accounts were internally created without a corresponding customer and used to trade on the Quadriga platform. [EY] was further advised that deposits into certain of the Identified Accounts may have been artificially created and subsequently used for trading on the Quadriga platform.”

The monitor has also been trying to secure transaction and account balance data from the platform, which is stored on the cloud by Amazon Web Services, however:

“Due to the account being a personal account in the name of Mr. Cotten, AWS has indicated that it is unable to provide the Monitor with access to the AWS Account to permit a copy of the data that it is hosting to be secured.”

Some people in the crypto space have the feeling that the story about the death of the founder and the lost funds are not completely true and that this is was some sort of exit scam. Let’s hope that the truth can come out soon and that the clients of QuadrigaCX get back their Bitcoin holdings.

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