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QuadrigaCX filed for bankruptcy in 2019 after its CEO Gerald Cotten died under mysterious and sudden circumstances. Cotten was found to be the only one with access to cold wallets containing funds. pyramid. More than 100 BTC were mistakenly transferred to a wallet in 2019 following the bankruptcy filing, with bankruptcy trustee EY claiming the funds were lost because no one had access This weekend, wallets appeared, with funds transferred to a service of cryptocurrency mixing Dormant bitcoin wallets belonging to controversial exchange (no, not that one) QuadrigaCX woke up this weekend. More than 100 bitcoins linked to the defunct exchange came out of cold wallets that until now were thought no one could access. QuadrigaCX, for those unfamiliar, is the exchange founded by Gerald Cotten and the subject of the captivating Netflix drama “Trust No One: The Hunt for the Crypto King”. It was one of the first mainstream exchanges, handling over 80% of Canadian Bitcoin volume at one point. The only thing is, it was all a scam.
What happened to QuadrigaCX?
It filed for bankruptcy in 2019, owing almost $200 million to clients. It was later revealed to be a pyramid scheme, with Cotten opening accounts under pseudonyms and crediting himself with fictitious balances, which he then traded to unsuspecting clients. He was living a double life the whole time, and the exchange was nothing more than a front for an old-fashioned scam. Big four firm Ernest and Young (EY) is the bankruptcy trustee and provided an extra layer of intrigue when it reported that the firm mistakenly sent 100 bitcoins to a wallet it could not access. “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins… to Quadriga cold wallets that the company is currently unable to access. Monitor is working with management to recover this cryptocurrency from the various cold wallets if possible.”
CEO dies under mysterious circumstances
The reason this wallet was inaccessible, of course, is because CEO Cotten died under mysterious circumstances while traveling, spawning a million conspiracy theories. Apparently, he was the only one who had the keys to the offline wallets that contained the cryptocurrencies, which is why many accused him of faking his own death. This weekend, the cold wallet that received those 100 BTC in 2019 suddenly became active again. They sent 36 BTC from this wallet and 33 BTC from this wallet, which were two of the biggest transactions. But more than the amount, the destination is interesting – the coins were sent to Wasabi mixing service, a crypto mixing service, which acts to obfuscate the origin and destination of crypto funds.
What does that mean?
So is Gerald Cotten alive and well and swimming in his bitcoin savings? Magdalena Gronowska, a bankruptcy inspector and member of Quadriga’s creditors’ committee, said the funds were not moved by EY. And previous EY reports said Cotten was the only one with access to the wallets. Honestly, nobody knows. This is just another layer of mystery in a story that was already as bizarre, confusing, and murky as it could be. The only certainty we have is that Gerald Cotten was a fraud and QuadrigaCX was a scam, and now coins that supposedly only he had control of – which were considered lost, therefore, considering he passed away – are moving again. So either Cotten is alive or someone else has access to those wallets. But if the actor was legit, let me ask you this: why are they sending the funds to a mixing service?
