The auditing company Ernst & Young (EY) published the “Third Registrar Report” in a trial of the Canadian crypto exchange QuadrigaCX with clients.
According to the report, EY discovered six separate cryptocurrency wallets used primarily for storing Bitcoins - the most popular cryptocurrency on the platform. In addition to the erroneous transaction made in February, no deposits were made to these wallets since April 2018. In addition, they do not contain any funds, with the exception of 104 bitcoins sent in February. Thus, 26,350 bitcoins, or about $ 100 million at the current exchange rate, which the exchange must pay to its customers, are located somewhere else.
“To date, the applicants were unable to establish the reason why Quadriga could stop using the identified cold bitcoin wallets for deposits in April 2018. The registrar and managers will continue to explore the Quadriga database for more information, ”the report says.
The auditor does not report whether he managed to find other cold Bitcoin wallets of the exchange or purses for storing Ethereum, Litecoin, Bitcoin Gold and any other cryptocurrencies that should have remained at the company's disposal.
In the course of the investigation, EY established 14 user accounts that “could be created without following the standard Quadriga procedure under various names”. “The discovered accounts were created internally without notifying the relevant customers and were used to trade on the Quadriga platform. EY was also informed that funds for some of these accounts could have been deposited without making appropriate deposits and subsequently used to trade on the Quadriga platform, ”adds the auditor.
EY contacted other exchanges that could hold QuadrigaCX assets. Some of them confirmed that the former CEO of QuadrigaCX, Gerald Cotten, used their services, and one transferred the “minimum” volume of cryptocurrency to the auditor.
The company also tried to get information about account balances and access to other data stored on Amazon Web Services cloud servers, but “because this account is a personal account registered in the name of Gerald Kotten, AWS said that it couldn’t provide the registrar with access to it in order to obtain a copy of the data stored in a secure environment. "
The auditor, in turn, insists that the data stored in this account can help further investigation and asks the court to order the opening of access to it.
