BTC wallets linked to QuadrigaCX reawaken with $1.7m transfers

After being dormant for years, five wallets connected to the now-defunct Canadian cryptocurrency exchange QuadrigaCX have just been seen exchanging almost $1.7 million worth of bitcoin.

After the exchange’s founder passed away in 2018, it was assumed that the wallets were inaccessible since he was the only one with access to their private keys. However, crypto researcher ZachXBT recently noticed the five wallets that sent around 104 BTC to other wallets on Dec. 17. According to blockchain records, the wallets last sent bitcoin at least April 2018.

What happened to QuadrigaCX?

Gerald Cotten, the company’s founder and CEO, died in December 2018 and was the only person in charge of the private keys to the exchange’s wallets. QuadrigaCX, once Canada’s biggest cryptocurrency exchange, filed for bankruptcy in April 2019.

The firm made headlines two years ago with its missing funds. At the time of its bankruptcy, the exchange owed up to $200 million in cryptocurrency to about 155,000 members.

According to a study issued in February 2019 by Ernst & Young, one of the Big Four accounting firms in charge of the exchange’s estate, on February 6, 2019, QuadrigaCX unintentionally moved around 103 BTC to cold wallets that only the deceased Cotten could access. The amount is nearly comparable to how much bitcoin has just been transferred.

QuadrigaCX declared at the time that it would work with management to get the bitcoin out of the cold wallets. In 2023, the regulatory future of cryptocurrency will be decided.

Was Ernst & Young behind this rekindling? Did Cotten die?

Conspiracy theories claimed that the founder of QuadrigaCX faked his death as part of an illegal exit scheme. The tale served as the topic of a Netflix documentary ‘Trust No One: The Hunt for the Crypto King’ in 2022.

Years before he passed away in 2014, Cotten stated on a podcast that printing private keys and keeping them offline in a safety deposit box was the best method to maintain them. This revealed that the exchange had kept its private keys offline in the business’s safety deposit box at a bank.

It needs to be clarified whether Ernst & Young’s recovery attempts are responsible for the movement of the BTC and, if so, where the keys were found remains a question as the only holder known was reportedly deceased. No comments have yet been made regarding this development.