In 2018, it was the end of the bitcoin exchange (BTC) QuadrigaCX. Its founder Gerry Cotten was declared dead on December 9, 2018, taking with him the private keys of bitcoin wallets. But now, on December 17, 2022, 104 bitcoins returned from the Kingdom of Darkness to blend into the crowd. This was without counting the aggrieved customers who have been scrutinizing bitcoin addresses since 2018.
Gerry Cotten and his bitcoin exchange Quadriga CX
QuadrigaCX, Canadian exchange, had left more than 75,000 users on the floor (and at least 210 million Canadian dollars, about 190 million US$). Gerry Cotten, who died at age 30 in India in more or less mysterious circumstances (no autopsy had been performed) still haunts injured customers. The Netflix documentary tells this story in the documentary “Crypto-parano, investigation at the borders of the virtual”. The search for funds was entrusted to Ernst & Young in early 2019. Many users have also turned into crypto-detectives.
Has Ernst & Young recovered funds?
In its 2020 report, Ernst & Young was then able to recover the equivalent of 1.4 million Canadian dollars in crypto and 662,000 USD from various payment processors (the intermediary companies that allowed users to change their FIAT to cryptocurrencies). Some funds in the bank had been frozen before the death of Cotton, preventing users from withdrawing their holdings. A dispute had arisen with WB21, now called Black Banx, which allegedly had possession of $9 million from Quadriga. Ernst & Young had also repatriated cryptocurrencies from various CEXs.
A disastrous accounting and a balance sheet difficult to estimate
The firm Ernst & Young discovered accounting as fanciful as that of FTX. On February 6, 2019, Quadriga even mistakenly sent a hundred bitcoins to addresses whose private keys were lost (reported by Cabinet Miller and Thomson). In any case, not lost for everyone it seems… Between 2016 and 2019, these are (among others) 9,450 bitcoin (BTC), 387,738 ethers (ETH) and 239,020 litecoins (LTC) that would have been “moved”. The Ernst & Young report talks about 106.5 million US dollars in cryptos and $56.2 million in FIAT (USD and CAD) due to QuadrigaCX clients (as previously stated estimates in FIAT vary depending on crypto volatility).
104 bitcoins moved on December 17, 2022
This incredible discovery is all the more surprising since no one had, in theory, the private keys of the cold wallets in question. These bitcoins now represent more than one and a half million euros. Inactive since February 2, 2019, here are these addresses:
1HyYMMCdCcHnfjwMW2jE4cv9qVkVDFUzVa – was emptied of 36.37786282 BTC
1JPtxSGoekZfLQeYAWkbhBhkr2VEDADHZB – emptied of 33.19556316 BTC.
1MhgmGaHwLAvvKVyFvy6zy9pRQFXaxwE9M – emptied of 19.54328527 BTC.
1ECUQLuioJbFZAQchcZq9pggd4EwcpuANe – emptied of 10.34268585 BTC.
1J9Fqc3TicNoy1Y7tgmhQznWrP5AVLXj9R – emptied of 4.87560516 BTC.
Two blockchain analysis sites, Wallet explorer and OXT, determined that it was the same seed, a single bitcoin wallet. As shown zachxbt on Twitter, these and other bitcoins are coming here. It would seem that they are then sent to a mixer, Wasabi.
Litecoin addresses belonging to Quadriga?
4 years ago, various users would have identified wallets that would belong to Quadriga: Litecoins. Do they really belong on the exchange? If so, there is a lot of movement right now. And enough to repay all creditors…
LLVC5kcWfHvY3Gonv9jYfi7BpwBStgf1AF : last outgoing movement 21 December 2020.
LXTQdps2Pf83WdAXMinboiqLsEjSWrwJCD : last incoming movement 22 December 2022.
LcSNbqqVpo1d7nkmGgCb9fvnYJv2xeiLdN : last movements (incoming/outgoing) October 2021.
LTU2cds4aSdXFip9sV4gXphnhxGQjgfjmg : a transaction at the beginning of the year distributed to an address on December 22, 2022.
The firm Ernst&Young would have identified a 6ᵉ bitcoin address, fully emptied on December 3, 2018, 6 days before the presumed death of Gerry Cotten. On August 30, 2022, the firm Millet and Thomson warned aggrieved customers that there was still time to file a complaint for reimbursement if necessary. The December 20, 2022 update gives the bitcoin addresses, but they are incorrect: you can follow the movements of the addresses in question in the previous paragraph.
All the information concerning the compensation process can be found on the website of Ernst&Johnson.
If you understand English, here is a link to podcasts that tell the story of QuadrigaCX.
You now have a portion of BTC and LTC addresses to follow if you want to play detective. No one knows at this time who holds the keys to all these addresses. Many will again wonder about the real or supposed passing of QuadrigaCX owner Gerry Cotten. Beyond that, one wonders how and why bitcoins could have landed on these wallets in 2019. Could Gerry Cotten have used software like dead man’s switch to program the sending of the btc then the sending of the keys to someone after his death? (Cotten had made his will 3 weeks before his disappearance). So many unanswered questions…
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