Quadriga crypto plot thickens

$2.4 million worth of bitcoins were mysteriously transferred from virtual wallets linked to QuadrigaCX, the bankrupt Canadian crypto exchange that was revealed to be a Ponzi scheme. 

The strange part? Those wallets were previously thought to be inaccessible, and we don’t know where the bitcoins have gone. 

Catch up: QuadrigaCX was once Canada’s largest cryptocurrency exchange but filed for bankruptcy in 2019 after its founder Gerald Cotten died under odd circumstances while travelling in India.

  • Quadriga’s management initially claimed that its customers’ assets were in “cold wallets”—offline, password-protected storage for crypto—that only Cotten could access.
  • Quadriga’s bankruptcy trustee, Ernst & Young, later found that the wallets were empty and that Cotten had been running Quadriga as a Ponzi scheme.

Fast forward: The movement of bitcoins from the wallets means they are apparently still accessible to someone and raise obvious questions about who that person might be. 

  • Ernst & Young say they don’t have the answer to that question but hope that blockchain tracing can help track down the stolen funds.

Why it matters: Quadriga’s 76,000 customers lost $215 million when the exchange collapsed and haven’t received any compensation—the latest theft from what’s left of their assets is more salt in that wound.