QuadrigaCX Accidentally Transferred $500K in BTC to Forbidden Cold Wallets

According to a report published by Ernst and Young on 12th February ’19, one of the major crypto exchanges of Canada, QuadrigaCX, by mistake transferred around $500,000 USD in Bitcoin [BTC] to its cold wallets in early February this year.

Gerald Cotten, the founder of QuadrigaCX, died at the age of 30 in December last year. The exchange platform has not been able to get access to its cold wallets since then, as Gerald Cotten was completely responsible for the wallets and the corresponding keys of the cold wallet. A huge number of assets of Quadriga have been reportedly lost in the missing cold wallets. In February this year, it was reported that Quadriga had lost $190 million dollars in digital assets.

The exchange platform had earlier appointed the ‘Big Four’ audit firm Ernst and Young to act as an independent third party so as to keep a check on the proceedings in a creditor protection case. The recently released report which has been dubbed as the ‘First Report of the Monitor’ aims to give the court all the updates which are related to the proceedings.

The reports states,

“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access. The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”

Ernst & Young have secured a number of Quadriga electronic devices which were reportedly used by Cotton. This includes four cell phones, four laptops and three fully encrypted USB keys. According to the document, the devices are currently secured in a safety deposit box which is rented by Ernst & Young.

It has been recently reported that the Ontario Securities Commission (OSC) was looking into Quadriga.

One of the OSC spokeswomen, Kristen Rose said,

“Given the potential harm to Ontario investors, we are looking into this matter and have already been in contact with the monitor.”

Kristen Rose reportedly did not agree to confirm whether this meant that the Commission was formally investigating the exchange platform or not. Post the comments by the OSC, the British Columbia Securities Commission has claimed that it does not regulate QuadrigaCX. This claim has been made as the firm had shown no signs of trading of securities.

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