Dormant Wallets of Quadrigacx Become Active and Execute BTC Transactions Worth $1.7 Million

Dormant Digital Wallets Belonging To Long-Defunct Firm Transact Bitcoins

Three years ago, in February 2019, a popular crypto trading platform, Quadrigacx, informed its members of temporarily shutting down its operations.

Customers were explained that the firm was facing a liquidity crisis and the solution necessitated the temporary suspension of its business operations.

However, operations did not resume which resulted in the filing of court proceedings by various complainants who were actually customers of Quadrigacx.

Proceedings Went Up To the Supreme Court

The matter went up to the Supreme Court of Nova Scotia. The Court ordered the firm to seek protection under the Companies’ Creditor Arrangement Act (CCAA).

EY’s Appointment as Quadrigacx’s Operator

Eventually, the operations of the firm were handed over to the globally renowned chartered accountancy firm, EY under Court’s directions. The accountancy firm was furthermore directed to manage the assets belonging to Quadrigacx.

EY informed Court that upon the death of Gerald Cotten (i.e. founder of Quadrigacx), approximately $150 Million in funds were gone missing. As reported by EY, these missing funds were lying in accounts held by the deceased Cotten.

However, the funds could not be accessed as they would require private keys which were only known to Quadrigacx’s founder.

Thereafter, conspiracies emerged that suggested that Cotten was alive and may be hiding for faking his death. To date, the mystery remains unfolded but now a new shocking revelation has surfaced.

Twitter User Identifies Unauthorized Transactions from Quadrigacx’s BTC Wallets

A Twitter user, who goes by the name ‘Zachxbt’, claimed that he witnessed 140 Bitcoins moving from accounts belonging to Quadrigacx.

As per today’s market value, 104 Bitcoins would literally mean US$1.75 Million.

According to Zachxbt, approximately 69 units of Bitcoins were deposited with a Bitcoin wallet service called ‘Wasabi’ on 19th December 2022.

Even chartered accountancy firm, EY, also took note of Bitcoin movement from Quadrigacx’s long-dormant accounts on 20th December 2022.

EY issued a notice in this connection which was addressed to Quadrigacx’s victims/customers informing them about unauthorized transactions.

Somebody Is Accessing Quadrigacx’s Bitcoin Funds

It has been alleged by EY that it neither authorized such transactions nor made the Bitcoin transfers in question.

EY identified at least 6 wallets belonging to Quadrigacx from where Bitcoin transactions were made. However, the Twitter user took note of 5 accounts only.

It was explained by EY that the firm had stated on oath before the Courts that the company’s Bitcoin wallets were inaccessible.

EY is hence claiming that the funds were deliberately transferred by the firm into cold wallets so that nobody can access them.

According to the information provided by Zachxbt, accounts namely 1Mhgm and 1J9Fq became active and transferred Bitcoins into the “1GVsp” wallet.

Quadrigacx Lied before the Court

Similarly, Zachxbt also revealed that Bitcoin funds, lying in accounts namely 1JPtxS and 1HyYM, were moved into Wasabi’s wallets.

In the meantime, EY has informed the Court of what it has revealed with regard to moving Bitcoins from the accounts of Quadrigacx.

It told the Court that it is hence a lie that the accounts were inaccessible and in fact, somebody has access.

Since cold wallets are not connected to the internet, hence, it cannot be assumed that the accounts were hacked by somebody. Similarly, it cannot be assumed anymore that the funds are inaccessible.

Quadrigacx is not the only platform that has become a hot topic among investors and the crypto community lately. Several other platforms have been involved in similar kinds of activities lately.

Even the likes of Alameda Research, the sister company of FTX exchange, which had filed for bankruptcy, also have its wallets on the move.

Although many have speculated that the movement being recorded for the Alameda Research platform might be an exploit, some claim it is an inside job.

It is alleged that the platform is involved in moving funds out of its platform to other exchanges and wallets.