Beleaguered Canadian cryptocurrency exchange QuadrigaCX allegedly never had the $190 million in Bitcoin (BTC) it purportedly lost access to when its CEO unexpectedly perished.
This was asserted in new research released on February 5.
The report, published on cryptocurrency portal Zerononcense Blog, makes a number of claims about the real state of QuadrigaCX’s Bitcoin holdings, all of which dispute official statements that were made.
QuadrigaCX has been up against financial challenges since its CEO Gerald Cotten supposedly died of complications from Crohn’s disease late last year.
In January through an affidavit made by Cotten’s wife, it was divulged the exchange apparently had no access to its wallets, as Cotten had not left any passwords. 115,000 customers were left without funds, which ran to an estimated $250 million CAD ($190 million USD) in cryptocurrency and fiat currency.
However, Zerononcense argues several claims in the affidavit, including that QuadrigaCX had cold wallets and these held the $137 million in quarantined cryptocurrency funds.
“It appears that there are no identifiable cold wallet reserves for QuadrigaCX,” the first of six summary conclusions in the report claimed. The research said that QuadrigaCX likely only had cryptocurrency reserves of below $100 million.
The report also pays down evidence that shows a party actually had access to the company’s wallets after Cotten passed on.
“It does not appear that QuadrigaCX has lost access to their Bitcoin holdings,” the research said.
“It is worth noting that there are several outgoing transactions that have been made since the alleged date of Gerald Cotten’s passing (December 9th, 2018).”
Further doubts revolve around QuadrigaCX making use of customer deposits to pay customer obligations.
The research indicated that a comparison of QuadrigaCX’s withdrawal practices to those of other cryptocurrency exchanges like Coinbase, Bittrex and Binance shows that the “movement of bitcoins to satisfy customer demand is highly unorthodox and extremely inefficient for any legitimate exchange.”