QuadrigaCX’s Audit Cannot Account for 26K BTCs

New Ernst & Young Report Reveals QuadrigaCX Has $21 Million in Assets

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After the death of QuadrigaCX’s founder, the court tasked EY to investigate the matter and conduct an accounting check. In the recent report, the firm has provided the authorities with ‘defected’ BTC wallets which were either cold or offline.

But the issue still persists. Unfortunately, $100 million equivalent of crypto is yet to be accounted. The firm released its report on Friday and outlined its progress on the matter. Even though most of the particulars in their report were already known (e.g. getting onboard 3rd party payment processors to transfer the fiat to Quadriga wallets), EY refuses to offer any information when it comes to their efforts on searching for the missing cryptos.

Quadriga made a statement a couple of weeks ago, mentioning that it owes its customers roughly $200 million. But please be advised that $137 million alone, is crypto! Just to build up the perspective, this huge amount of crypto was inaccessible after the death of the CEO, since he transferred the money in cold wallets and only he had access to the private keys. A blunder indeed…

This latest report released by EY is a major step forward because previously, they were quiet on the matter and the exchange as well as the auditing firm, both sparked speculation that the cold wallets might be ‘non-existent’.

Getting specific about the report, EY successfully identified 6 BTC cold wallets that were used by Quadriga’s customers. It is also worth mentioning that out of these addresses, 5 were already identified by some researchers days after the incident where 103 BTCs were transferred to the ‘cold storage’. As per the report, the cumulative balance of 5 wallets happens to be about $400,000. However, the 6th wallet contains no BTC and hence, roughly 31 BTCs that were transferred just a couple of days before the CEO’s death still cannot be found.

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Putting together all of the calculations, the audit firm still has to trace 26,350 Bitcoins, which account to a massive $100 million (that the exchange owes to its customers).

EY is still out for the hunt, but it has not made any statement as to whether there might be other cold wallet accounts holding BTC, LTC, ether, or any other crypto for that matter.

What’s even more thrilling is that about $16,000 worth of cryptos have also been transferred to Quadriga’s hot wallets after EY published its first report. The auditing firm is also quite keen to find out who has been depositing all these funds and a recommendation is expected to come out soon.

EY also reached out to more than 10 different exchanges to investigate Quadriga’s accounts and seek details and until now, only 4 of them have responded. But the auditing firm did not publish their names in the report.

Meanwhile, Quadriga has also requested the court to appoint a restructuring office and EY plans to support this stance.


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About Azeem Saifi