“QuadrigaCX Bitcoin Wallets Suddenly Activated, Sparking Speculation”
The collapse of the QuadrigaCX cryptocurrency exchange in Canada resulted in numerous customers losing their funds, with the majority being attributed to the mismanagement of founder Gerald Cotten. It was previously believed that the wallets of QuadrigaCX were inaccessible because Cotten had taken the private keys to his grave upon his death in 2018. However, recent activity on 5 dormant wallets linked to the exchange has sparked speculation as to who may have access to them.
$1.7 Million in Bitcoin Moved from Dormant Addresses
On-chain investigator ZachXBT uncovered the movement of approximately 104 BTC, worth $1.7 million, from the previously inactive wallets over the weekend. The connection of these wallets to QuadrigaCX was previously established by researchers in 2019 who were attempting to determine where Cotten had stored the funds. The lack of activity on these wallets since the founder’s death further supported this link.
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Where Did the Bitcoin Go?
Currently, the $1.7 million in bitcoin is sitting in unknown wallets, as none of the funds were transferred to centralized exchanges. This has led to speculation as to who may be responsible for the movement of the funds. One theory is that the funds may have been accidentally transferred to Cotten’s cold wallets. Another possibility is that it is related to the recovery efforts of Ernst & Young, which has been tasked with fund recovery for the exchange. However, a QuadrigaCX creditor has stated that Ernst & Young is not behind the transfer. The fact that roughly half of the BTC was sent to the cryptocurrency mixing platform Wasabi also suggests that Ernst & Young is not involved.
QuadrigaCX customers who lost nearly $200 million when the exchange collapsed are yet to be compensated. Ernst & Young has attributed this to the fact that Cotten was the only one with access to the wallets and, due to a lack of clear record-keeping, recovering the funds has proven difficult.
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