Crypto Researcher: QuadrigaCX Exchange Never Had $190 Million Worth of Bitcoin in its Coffers
The story of distressed Canadian cryptocurrency exchange QuadrigaCX which filed for bankruptcy since the sudden death of its CEO, Gerald Cotten, has taken a new dimension, as a recent research report by Zerononcense has revealed that the cryptocurrency trading venue never had the $190 million in bitcoin it claimed to have lost access to since the demise of Cotten, reported Finance Magnates on February 5, 2019.
QuadrigaCX May Have Lied to Everyone
Per sources close to the matter, QuadrigaCX started experiencing financial difficulties earlier in December 2018 when the founder of the platform, Gerald Cotten suddenly died of Crohn's disease.
Reportedly, Cotten failed to keep a backup for the passwords of the exchange's cryptocurrency wallets.
In January 2019, the wife of the CEO, Jennifer Robertson filed an affidavit in a Canadian court of law, claiming that QuadrigaCX had lost access to the entire 250 million Canadian dollars ($190 million) worth of bitcoin and other cryptoassets, plus $115,000 fiat money in possession of the exchange before her husband's death.
Zerononcense Smells a Rat
Now, according to a research report released by Zerononcense, all the claims made by Cotten's wife are entirely false.
Zerononcense claims that the exchange had far fewer bitcoins in their possession than what Robertson stated in her filing to the court, adding that the exchange did not even have a cold wallet.
“It seems the number of bitcoins in QuadrigaCX's coffers is significantly less than the amount reported in Jennifer Robertson's affidavit, submitted to the courts on January 31st 2019,” stated Zerononcense, adding “It appears there are no identifiable cold wallets for QuadrigaCX.”
QuadrigaCX is a Ponzi Scheme?
Interestingly, Zerononcense has also alleged that the exchange has shown signs of distress for quite some time now, as there have been delays in honouring clients' crypto withdrawal requests due to the fact that the platform was using customers' deposits to pay withdrawal requests.
Zerononcense noted that:
“At least some of the delays in delivering cryptocurrency withdrawals to users' were caused by lack of funds on the platform. Sometimes, QuadrigaCX was forced to wait for enough customers to deposit funds before it processes the withdrawal request of others.”
Somebody Has Access to the Funds of QuadrigaCX
Specifically, Zerononcense also pointed out that it appears an entity has access to the funds of the exchange even after the demise of Cotten, as a good number of outgoing transactions have been made from the purse.
“It is worth noting that there are several outgoing transactions that have been made since the alleged date of Gerald Cotten's passing,” Zerononcense concluded.
Some users of the platform have also taken to social media platforms to express their displeasure over the operations of QuadrigaCX. A Twitter user with handle, @yanabrenar tweeted:
“I checked my wallet that is quadrigacx wallet on blockchain and found out my half a bitcoin has gone. Thank you very much for stealing. How would you comment that???”