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

Your weekly Mountain Minute

Golden’s 60-second news recap

An Everest fundraiser

Man set to climb elevation of Mt. Everest in one day to raise school lunch funds

Interior Health study offers take-home drug testing kits to spot fentanyl

Interior Health to evaluate safety of at home drug testing kits aimed at reducing fentanyl overdoses

Golden Fire Rescue training grounds get a facelift

Residents may have noticed some changes at the fire hall in the… Continue reading

Area A Aquatic Feasibility Advisory Committee appointed

Submitted A committee has been formed to look into the idea of… Continue reading

Kelowna RCMP interrogation video brings home reality in ‘visceral way’: former TRC chairman

Video of Mountie interrogating young Indigenous woman disclosing sexual abuse under fire

Update: Mother dead, child in critical condition after carbon monoxide poisoning at Shuswap campground

The woman was found unresponsive insider her tent and the youth was taken via air ambulance to hospital

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

Montreal researchers create audible hockey puck for visually impaired players

Three years ago, Gilles Ouellet came up with the idea for a puck that makes a continuous sound

Former B.C. Greyhound bus drivers head to Penticton for goodbye party

Big bash runs until Sunday, funded by drink cans left behind on busses over the years

Boy, 12, arrested after allegedly pulling a knife on another child at a Surrey park

The child was later released into his parents’ custody as Surrey RCMP continue their investigation

Full-scale search underway for missing kayaker on Okanagan Lake

Kelowna Paddle Centre member Zygmunt Janiewicz, 71, failed to return from his ‘daily kayak’ on the lake

ICBC urging drivers to slow down this May long weekend

Speed is number one cause of car crash fatalities: ICBC

Bucks hammer Raptors 125-103 to take 2-0 playoff series lead

Toronto heads home in a hole after second loss to Milwaukee

Most Read