key takeaways
- QuadrigaCX filed for bankruptcy in 2019 after the death of its CEO Gerald Cotton under mysterious and sudden circumstances
- Cotten was claimed to have sole access to the cold wallet containing the funds
- Cotten was later found to have defrauded customers of QuadrigaCX with a Ponzi scheme.
- Over 100 BTC were accidentally transferred to a wallet in 2019 after bankruptcy filing, bankruptcy trustee EY says funds are now lost because no one had access
- This weekend, the wallets resurfaced, with funds being transferred to a crypto mixing service.
sleeping Bitcoin A wallet belonging to the controversial exchange (no, not that one) QuadrigaCX woke up this weekend. Over 100 bitcoins tied to inactive exchange move out of cold storage Purse Which till now was considered as a wallet that no one could access.
QuadrigaCX, for anyone unfamiliar, is the exchange founded by Gerald Cotton and the subject of the gripping Netflix drama “Trust No One: The Hunt for the Crypto King”. It was one of the early mainstream exchanges, at one point handling over 80% of Canadian bitcoin volume. Only thing was, it was all a scam.
What happened to QuadrigaCX?
It filed for bankruptcy in 2019, owing customers nearly $200 million. This was later revealed to be a Ponzi scheme, in which Cotton opened accounts under aliases and credited himself with fictitious balances, which he later traded against unsuspecting customers. He was living a double life the whole time, and the exchange was nothing more than an old fashioned Ponzi scheme.
Big Four company Ernst & Young (EY) is the bankruptcy trustee, and it provides an extra layer of intrigue when it reports that the company mistakenly sent 100 bitcoins to a wallet.
“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins… to a Quadriga cold wallet, which the company is currently unable to access. Monitor is working with management to recover, if possible, this cryptocurrency. to recover from various cold wallets.
CEO died under mysterious circumstances
Of course, the reason this wallet is inaccessible is because CEO Cotton died under mysterious circumstances during the trip, leading to a million conspiracy theories. He was apparently the only person who had the keys to the offline wallet containing the crypto, which is why so many people blamed him for his own death.
This weekend, the cold wallet that had received those 100 BTC in 2019 suddenly became active again. it sent from 36 btc this wallet and from 33 BTC this wallet, which were the two largest transactions. But far more than the amount, the destination is interesting – the coins were sent to Wasabi, a crypto mixing service, which serves to obscure the source and destination of the crypto funds.
what does this mean?
So, is Gerald Cotton alive and well, and digging into his bitcoin savings?
Magdalena Gronowska, bankruptcy inspector and member of Quadriga’s committee of creditors, said the money was not transferred by EY. And an earlier report from Ernst & Young said Cotton was the only one with access to the wallet.
Honestly, nobody knows. It’s just another layer of mystery to a story that was already as bizarre, confusing, and shady as can be. All we know for sure is that Gerald Cotton was a fraud and QuadrigaCX was a scam, and now coins that supposedly only he had control of – which were lost, therefore, assuming he passed away – Running again.
So, either Cotton is alive or someone else has access to those wallets. But if the actor was legit, I ask you this: why are they sending the money to a mixing service?