$100 million worth of Bitcoin is still missing according to Ernst and Young

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In February, $400,000 worth of the cryptocurrency was inadvertently sent to cold and offline bitcoin wallets, but this isn’t a part of the missing funds.

Ernst and Young (EY) is the monitor of Quadriga (formerly Canada’s largest cryptocurrency exchange, which closed operations in January after the death of its founder and CEO, Gerald Cotton in India) and has released two reports before this latest report.

Although it was well-known that Quadriga has been searching for its missing cryptocurrencies, it was believed that these were inaccessible because they were held in cold accounts by the deceased CEO Gerald Cotten and no one else had access. Until the latest EY report, there was much speculation that these cold wallet addresses did not exist.

6 addresses identified

However, six addresses have now been named. Independent researchers had already found five of these after Quadriga transferred 103 bitcoin to them in supposed error. When EY’s report was released, the total amount in these accounts was 104 BTC, which equates to around $400,000.

The other address was empty but did have $118,000 worth of BTC until a few days before the CEO’s death. This means that there is still $100,000 worth of BTC owed to around 115,000 customers according to the Independent. There was no indication of any other bitcoin storage wallets.

Separately from the cold wallets issue, there have been 21,000 CAD, which equates to 16k USD, deposited as various cryptocurrencies into Quadriga’s online wallets since the end of January. Quadriga is working alongside EY to discover the origin of these deposits.

Mystery deepens

As well as the missing money, the mystery deepens as many Quadriga customers have begun to raise suspicions about Mr. Cotten’s death. He is said to have passed away from complications linked to his Crohn’s disease. However, Steven Bunnell, a former member of the US Department of Homeland Security General Counsel, claims many suspicious circumstances are surrounding his death.

Currency exchanges

EY reports that QuadrigaCX could have more than 14 accounts for various crypto exchanges. Four of these have responded to EY’s investigations. Some admitted that Quadriga, or its CEO, did hold accounts and at least one transferred a small amount of cryptocurrency to EY. We do not, however, know what these exchanges entailed.

It’s probable that some of the cryptocurrencies that were in the cold wallets were sent to exchanges, according to EY. They stated that “it’s not possible to ascertain with absolute certainty from public information who the owner of an address is.” Although, there are tools that confirm which exchanges the own specific addresses. Despite this, the investigation is still in its infancy.

Amazon Web Service Accounts

It appears that Quadriga’s CEO set up an account with AWS for the storage of Quadriga data. As Cotton used a personal account for AWS, they would not provide more information on the matter. Ey is, therefore, seeking an order from the court to make AWS allow EY to access this information. EY would like to view records of the accounts controlled by Quadriga. Until now, they have managed to access some balances of user accounts alongside information on transactions.

Points to note

Quadriga wishes to install a chief restructuring officer. This is supported by EY and was initially requested in court by Cotten’s widow, Jennifer Robertson. Furthermore, EY agrees with the extension of protection of Quadriga from investor lawsuits and deems 45 or 60 days as appropriate.

There are, of course, other law firms (Miller Thompson, Cox, and Palmer) that represent creditors who only want a 30-day extension to be applied. In a separate notice, Miller Thompson appealed for affected parties to apply to serve on a committee of affected users. They have to apply March 8. Opting out is an option, but creditors need to complete a filing a separate form.


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