QuadrigaCX’s Ethereum Storage Finally Unearthed – What Happens Now?
The drama of the QuadrigaCX fiasco has been going on since December. Many people already know that founder and CEO Gerald Cotten passed away during international travel as a result of complications with Crohn’s disease. At the time, only days before, he had changed all personal and joint accounts to be placed under the possession of his wife. Unfortunately, his death was the beginning of a long series of unfortunate events that have led to the problems that are here today.
Jennifer Robertson, his widow, attempted to keep the exchange’s community in the loop, though it had been struggling for the better part of the year to be able to process withdrawals. Unfortunately, as January came to the close, the company became involved in the endless legal battle that they are currently involved in.
The company had received 30-day protection against the creditors that have been waiting to have their fiat currency and their cryptocurrency returned to them. The creditors have fought back, and there has been much dispute over where the cold wallets are, considering that their private keys would unlock the majority of the crypto assets that creditors have waited for. Now, according to one of our frequent guest writers James Edwards of ZeroNoncense, “there is a very strong possibility” that the crypto funds from the wallets are at Kraken, Bitfinex, and Poloniex.
Edwards closely examined the various exit points in the QuadrigaCX wallets to come to this conclusion, and his research indicated that there was over 600,000 TH that was moved to these exchanges to store the assets while the platform was still in operation. Considering that Robertson has continually said that no one presently involved in the management of the funds has been aware of where Cotten kept or moved funds, it is possible that neither they nor the creditors know this information.
If the exchanges are still holding the funds, that could explain why the alleged cold wallets have not been discovered. Based on the affidavit from Robertson, it is also likely that there are several other exchanges holding the QuadrigaCX funds. The most logical next step is that the parties reach out to the different exchanges for further research, which would not cost anything. If the funds are found, due to the circumstances, a private key would not be required. Edwards believes that the exchanges would be “more than willing to facilitate the transfer of these funds back to QuadrigaCX so that they may be redistributed to their customers.”
By using the information that Edwards is suggesting, the platform may be able to regain their daily operations, and there’s realistically only positive gains that can come by making the information known. Edwards adds,
“The fact that QuadrigaCX had accounts at these exchanges is established and proven in this report. The question now is whether the funds that were transferred to these exchanges for storage purposes are still there. And even if they are not, the exchanges should at least be able to identify where the funds were then transferred to.”
The wallets in question, as stated in the ZeroNoncense report, are:
- 0xb6aac3b56ff818496b747ea57fcbe42a9aae6218 (current hot wallet)
- 0x027beefcbad782faf69fad12dee97ed894c68549 (former hot wallet)
The further research in the report shows exactly how none of these wallets are from customers and are instead held by QuadrigaCX. Edwards takes the situation a step further, indicated that he believes that “Jennifer Robertson, the Court Monitor, and all other related individuals at QuadrigaCX were and are unaware of the fact that Gerry Cotten sent these funds to these exchanges.”
Owner Jesse Powell of the Kraken Exchange has even confirmed this information with Edwards. Instead of simply assuming that readers will accept his research, Edwards spoke with Powell as an expert in the area of exchange practice, and due to his notability as a public figure in cryptocurrency.
Hopefully, this eye-opening report from Edwards serves as a way to bring good news to the management team of QuadrigaCX, along with the creditors. The images below show the discussion between the two parties:
At that point, Powell said:
Now, the real question is just, what happens next? The information is available and out there, and clearly, the courts will want to examine the lead that Edwards has given if they believe that it is a path worth pursuing to find the missing funds for creditors and the exchange. It does not look like the exchanges even knew that these funds could have come from QuadrigaCX at this point, though Kraken has offered a bounty of $100,000 for anyone that has information about where the funds could be. In the meantime, Bitfinex and Poloniex have made no confirmation or denial about the presence of the funds on their exchanges.