Bitcoin Linked to QuadrigaCX Moves for First Time in 3 Years

Blockworks December 20, 2022
Updated 2022/12/20 at 4:03 PM
3 Min Read
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Five bitcoin wallets attributed to defunct crypto exchange QuadrigaCX have curiously moved funds for the first time since the firm’s bankruptcy three years ago.

The movements were identified by blockchain sleuth ZachXBT, who said on Twitter that 104 BTC ($1.75 million) was transferred on Dec. 17.

ZachXBT noted that 69 BTC ($1.16 million) was sent from two of the addresses to crypto mixing service Wasabi, usually used to obfuscate transactional history of particular bitcoins. The QuadrigaCX-linked bitcoin addresses have been inactive since 2019.

EY, the bankruptcy trustee and court-appointed monitor for QuadrigaCX’s estate, announced in 2019 that the company had accidentally moved 103 BTC (worth just under $469,000 at the time) to five cold wallets inaccessible by the company.

“The monitor is working with management to retrieve this cryptocurrency from the various cold wallets, if possible,” EY said at the time. Blockchain analysts previously linked those addresses to QuadrigaCX wallets; it’s those the same five addresses that are now active.

The circumstances surrounding the latest bitcoin moves are unclear. But Magdalena Gronowska, a member of QuadrigaCX’s creditor committee, told CoinDesk that EY had not moved the crypto, which suggests the bankruptcy trustee was not involved.

Gronowska separately tweeted that QuadrigaCX bankruptcy inspectors were aware bitcoins are moving. They’re now working to determine more in hopes of recovering the crypto.

Only QuadrigaCX CEO held private keys upon his death

Vancouver-based QuadrigaCX, once one of Canada’s biggest crypto exchanges, entered bankruptcy proceedings around three months after founder Gerald Cotten died unexpectedly while traveling in India due to complications from Crohn’s disease.

His widow, Jennifer Robertson, then told Bloomberg she was unable to locate the passwords or business records for the company.

Cotten alone controlled the private keys to QuagrigaCX’s operational wallets (different to the five bitcoin wallets recently active), leaving thousands of customers out of pocket.

His death sparked controversy and led to speculation that he’d faked his own death so he could make off with user funds, although those theories are yet unproven. Creditors previously requested authorities exhume Cotten’s body to confirm his death.

A Netflix documentary on the matter, “Trust No One: The Hunt for the Crypto King,” was released earlier this year.

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