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According to the latest court documents in the QuadrigaCX case, the exchange sent approximately $ 470,000 (approximately $ 355,000) worth of bitcoin from a portfolio to a cold store on February 6, 2019.
Ernst & Young's first report as a monitor of the controversial QuadrigaCX bitcoin exchange (QCX) complicates the story provided by the exchange because of its lack of access to the company's funds after the the death of its founder and CEO, Gerald Cotten.
The court document states: "On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $ 468,675 to cold Quadriga portfolios to which the company currently does not have access. The monitor works with management to recover this cryptocurrency from the various cold portfolios, if possible. "
With respect to the liquidation process for the distribution of QCX funds to TSX users, the report states that Ernst & Young has created a "disbursement account" pursuant to the orders of the Nova Scotia Court, "and [it] Jennifer Robertson "(Cotten's widow) received $ 150,000 to launch the account.
The document continues to state that the remaining funds in the stock market portfolio (approximately C $ 902,000, including $ 700,000 in bitcoins, $ 130,000 in ether and the remainder in bitcoin coins and litecoins) will be transferred to warehouses. refrigerators under the responsibility of Ernst & Young. management.
In an affidavit that was part of the ongoing court proceedings in the Nova Scotia Court, Robertson vowed that the exchange did not have access to the cold room because the keys and pbadwords were stored in one of the encrypted portfolios of Cotten.
According to the document, Ernst & Young also seized Cotten's computer hardware and accessories, which Robertson originally sold to Chris McBryan, a retired cybersecurity professional, from McKalian Sensors Inc.
"The devices arrested by Mr. McBryan include two (2) active laptops, two (2) older models of laptops, two (2) active cell phones, two (2) old cellphones & # 39; dead & # 39; ; and three (3) encrypted USB keys. The Forensic Science Group of the Comptroller is currently working with Dr. McBryan to better understand the measures taken with the devices and the information obtained to date on the devices to determine the next steps of the forensic science. In addition, the Controller was informed of the situation and took steps to recover Mr. Cotten's office, "reads the report.
Recovery of lost funds
The document also confirms that Ernst & Young has contacted nine known payment processors who have served as Fortranging banking partners to QuadrigaCX. The firm has not yet received the $ 30 million Canadian bank notes that the court affidavit and report say are under the auspices of Stewart McKelvey, the firm's Lawyers representing both Robertson and QuadrigaCX. One of these processors would have had to exchange $ 25.2 million of the $ 30 million worth of bank notes held by QuadrigaCX. Once the banks with which these processors work in the clear, these funds will be under the direction of Ernst & Young.
QuadrigaCX used these payment processors as a substitute for good banking relationships. According to sources close to the case, who asked to remain anonymous, Bitcoin Magazine, QuadrigaCX has a long history of problems in maintaining banking relationships, a tribulation best represented by CIBC freezing 25 million Canadian dollars in exchange-related funds in 2018. This freeze was one of many unfortunate who defined the exchange, especially million in ether in 2017 to a smart contract bug and to a reputation of withdrawal time of a month.
Speculation and rumors
Since the death of Gerald Cotten, rumors about the creditworthiness of QuadrigaCX, the identity of the co-founder since then, Michael Patryn, and the possibility of Cotten's death have appeared in the community. An alleged QuadrigaCX contractor, one of the seven who until recently formed the structure used by the company, has published a reddit AMA on r / QuadrigaCX2, accusing the fact that Cotten and Robertson have collaborated to scam users of the stock market. These accusations remain unfounded until now.
Canadian lawyers will meet in Halifax on February 14, 2019 to represent some 111,000 users affected by the stock market's woes, reports Bloomberg. In its decision of February 5, the Nova Scotia Court granted the creditors' protection to QuadrigaCX, preventing it from pursuing the lawsuit until the exchange and Ernst & Young can investigate his financial situation.
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