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

Rimbey cop following in dad’s footsteps

RCMP officer born in Rimbey

Rimbey high school girls rugby team undefeated in league play

Rimbey Spartons girls rugby team defeats Drayton Valley

Volunteers needed for meals on wheels

Meals on wheels offers great option for shut ins

4-H show and sale winners

Rimbey, Bluffton and Winfield 4-H members compete at show and sale

Lions Club help out WE group

Funds for outdoor rink at Rimbey elementary school

UPDATE: B.C. pilot killed in Honduras plane crash

The crash happened in the Roatan Islands area, according to officials

Growing wildfire prompts warning for High Level to prepare for evacuation

Town of High Level announced Monday that residents should get personal items in order

Carbon tax, desk-thumping on agenda in upcoming Alberta legislature session

Jason Kenney has appointed a panel to come up with ways to reduce spending in the budget this fall

Facebook takes down anti-vaxxer page that used image of late Canadian girl

Facebook said that the social media company has disabled the anti-vaccination page

Authorities warn out-of-control wildfire could cut northern Alberta town’s electricity

Alberta Transportation has closed Highway 35 south of High Level due to the fire

‘Rope-a-dope’: Environmentalists say Alberta war room threat won’t distract them

Those against Alberta Premier Jason Kenney aren’t worried about promise to fight critics of energy industry

Almost $13 million to be paid to Grande Prairie hospital subcontractors, others

No reasons for the Court of Queen’s Bench order were released

Canada’s parole officers say correctional system has reached breaking point

About half of Canada’s federal parole officers work inside penitentiaries and correctional institutions

Speed, alcohol considered factors in deadly Calgary crash: police

Two female passengers in the Corolla, aged 31 and 65, died at the scene

Most Read