WSJ: Expert Claims QuadrigaCX Funds Not Stuck, But Missing Altogether

The $145 million in digital assets that are reportedly stuck in encrypted cold wallet storage of QuadrigaCX crypto exchange could actually be missing, according to analysts cited by the Wall Street Journal on Feb. 6.In December 2018, the founder of major Canadian cryptocurrency exchange QuadrigaCX, Gerald Cotten, passed suddenly.

Cotten was reportedly the sole executive with access to the exchange's cold wallets.

Customers have been unable to withdraw funds owed to them, and the exchange has sought creditor protection in Canadian court.

A filing from Ernst & Young states, "Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units." 'Big Four' auditing firm Ernst & Young was appointed an independent third party to monitor the creditor protection proceedings.

James Edwards, a a cryptocurrency analyst who publishes research on a Zerononcense, reportedly reviewed the publically available transactions of the exchange, and found no evidence that the exchange controlled any of the wallets it claimed to.

According to Edwards, there is evidence to suggest that wallets with larger balances once existed, but those balances are very low.

Currently, the largest wallet is apparently a hot wallet, which is used for transactional purposes.

Elementus Group CEO Max Galka said it was "Extremely likely that there aren't any cold wallets."

The CEO of crypto exchange Kraken, Jesse Powell, tweeted on Feb. 2 that the story was "Bizarre and, frankly, unbelievable. Powell even suggested that the Royal Canadian Mounted Police contact his exchange as it has"thousands of wallet addresses known to belong to [QuadrigaCX]" that Kraken is investigating.

The exchange was unregulated as there was reportedly no indication that it traded securities or operated as an exchange.