Security & Fraud

QuadrigaCX Loses Another $250M CAD Of Crypto

QuadrigaCX Loses $250M CAD Of Cryptocurrencies

QuadrigaCX, the Canadian crypto exchange that previously lost $250 million CAD worth of cryptocurrencies and fiat, has reportedly lost an additional $500,000 CAD.

According to a report in CoinDesk, citing a report from Ernst and Young, the court-appointed monitor of QuadrigaCX, the crypto exchange mistakenly moved more than 100 bitcoins into a cold storage wallet that they aren’t able to access. The crypto exchange had previously said they couldn’t access the offline wallets because its Chief Executive Gerald Cotten, who died in December, was the only one who knew the location of the keys to those wallets.

The term “cold storage” refers to an offline wallet that is not connected to the internet, which means it is less susceptible to cyberattacks. That lack of connectivity means, too, that getting it all back can be a challenge.

“On Feb. 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 [CAD] to Quadriga cold wallets, which the Company is currently unable to access,” Ernst and Young wrote in the report, according to CoinDesk. “The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”

The auditor is taking control of QuadrigaCX’s hot wallet funds, transferring the digital tokens to its own cold wallet. The digital tokens include 51 bitcoin, 0.14 bitcoin cash SV, 33 bitcoin cash, 2,000 bitcoin goal, 800 litecoin and 950 ether, noted the report.

QuadrigaCX has been in the headlines ever since its disclosed that it can no longer access $190 million in cryptocurrency that it held on behalf of clients, due to the death of its 30-year-old-founder. Cotton, who died in India in December, was the only person who knew the passwords to the cold storage wallets. In a court filing, Cotten’s wife, Jennifer Robertson, said the normal procedure was for Cotten to move most of the coins to cold storage to protect them from getting stolen. The laptop that Cotten used to carry out the business of the exchange was encrypted.

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