As per the latest news correspondence, QuadrigaCX which is a major Canadian crypto exchange firm has accidentally transferred around $500,000 in Bitcoin (BTC) to one of its cold wallets which the firm believes it cannot access. This incident occurred earlier this month as per a report published by Ernst & Young.
Since the sudden death of its founder, Gerald Cotton in Dec’18, who was 30-year-old during the time of his death, QuadrigaCX has faced a lot of troubles. In the latest development, the exchange accepted the fact that it has made several attempts but still unable to access any of its cold wallets as Cotten had the codes and was solely responsible for the wallets and corresponding keys.
QuadrigaCX which is a cryptocurrency exchange, or a digital currency exchange (DCE) provides its customers services for the exchange of virtual currency into various assets, such as fiat or other digital currencies. The platforms usually work solely online, providing transactions in electronic forms and taking fees for them, though there are also some brick-and-mortar businesses that use traditional payment methods. Debit and credit cards, postal money orders and other kinds of money transfers are accepted to make an operation using a DCE.
Earlier, in the first week of February, Quadriga claimed that it has been missing around CA$190 million dollars which is equivalent to USD 145 million in digital assets. The huge chunk of Quadriga’s assets was believed to be lost in the missing cold wallets.
Previously, the company was asked by the court to appoint one of the ‘Big Four’ auditing firm, the Ernst & Young as an independent third party to follow up and monitor the proceedings. In terms of cryptocurrency, EY representatives have a positive attitude toward the technologies of blockchain and digital currency. There report which was recently released and dubbed as the “First Report of the Monitor” aimed to provide the court with an update in respect of the proceeding. The report threw some light on the various transfers made in the form of bitcoins which is amounting to 103 in numbers and valuing at around $468,675 to cold wallets which the Company is unable to access at this point of time. Currently, the appointed monitor has clubbed up with the Management and has been trying to retrieve this cryptocurrency from the various cold wallets as per a report dated February 6, 2019.
While conducting the audit, Ernst & Young has successfully secured some Quadriga electronic devices which was previously owned or used by Cotton. This includes four laptops, four cell phones, and three fully encrypted USB keys. All these devices have been kept in a safety deposit box which is rented by Ernst & Young, as per the document.
As per a leading news agency, Cointelegraph, Ontario Securities Commission (OSC) is currently looking into Quadriga. OSC confirmed that they are looking into this matter with due diligence and are in constant touch with the monitor.
Following the claims made by OSC, the British Columbia Securities Commission’s claimed that it is not is a position to regulate QuadrigaCX as the company had shown no signs of trading of derivatives or securities, or operating as an exchange in general.
At present, QuadrigaCX has become the subject of a bidding war as lawyers meet to win creditor representation. The hearing at the Nova Scotia Supreme Court on Feb. 14 will decide the fate as to which law firms can lobby for compensation on behalf of clients of the exchange, which currently owes them around CAD 260 million.