Research Claims QuadrigaCX Never Had the Lost $190 Million in BTC

The study raises many questions on the management of the Canadian exchange.

The woes of Canadian crypto exchange QuadrigaCX have taken another twist as the cryptocurrency portal Zerononcense made some stark claims about the exchange in a recently published report.

Published on February 5, the research report claims that QuadrigaCX never had the $190 million in Bitcoin it supposedly lost access to after the unexpected death of its CEO.

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An Unusual Case

QuadrigaCX’s financial difficulty started in December 2018, when the CEO of the exchange Gerald Cotten unexpectedly died from Crohn’s disease. Unfortunately, Cotten did not keep any backup for the passwords of the encrypted wallets of the exchange.

An affidavit filed by Cotten’s wife in January revealed that the exchange lost access to CAD 250 million ($190 million) worth crypto and fiat of around 115,000 exchange customers.

Zerononcense, in its research, disputes this very claim of Cotten’s wife and noted: “It appears the number of bitcoins in QuadrigaCX’s possession are substantially less than what was reported in Jennifer Robertson’s (wife of allegedly deceased CEO and Owner Gerry Cotten) affidavit, submitted to the Canadian courts on January 31st, 2019.”

The report also rejected QuadrigaCX’s claim of possessing cold storage wallets with $137 million in quarantined cryptocurrency funds stating: “It appears that there are no identifiable cold wallet reserves for QuadrigaCX.”

The research report further claims that the exchange was using customer’s funds to repay the withdrawal requests.

“At least some of the delays in delivering crypto withdrawals to customers were due to the fact that QuadrigaCX simply did not have the funds on hand at the time. In some cases, QuadrigaCX was forced to wait for enough customer deposits to be made on the exchange before processing crypto withdrawal requests by their customers,” the report noted.

Furthermore, the evidence also shows that a party has access to the company’s wallets even after the death of the CEO.

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“It does not appear that QuadrigaCX has lost access to their Bitcoin holdings,” the report added. “It is worth noting that there are several outgoing transactions that have been made since the alleged date of Gerald Cotten’s passing (December 9th, 2018).”

The victims of the exchange are also taking to Twitter and Reddit to uncover many suspicious activities. According to one victim, half of her holdings from the exchange controlled wallet disappeared.

Even if Zerononcense’s claims are not entirely accurate, the ignorance of such scale on the part of an exchange cannot be overseen.

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