Ernst & Young has reported that the embattled Canadian-based Bitcoin exchange firm, QuadrigaCX has sent the rest of its crypto funds to the big auditing firm.
February 22, 2019 | AtoZ Markets – Ernst and Young, which was appointed as a third party monitor to oversee QuadrigaCX proceedings on 5th January, has published its second report which revealed that the exchange firm has transferred the rest of its crypto funds to them. Early this month, we published the story of a Canadian-based crypto exchange firm, QuadrigaCx, which lost access to its cold storage and therefore couldn't pay about $190 million in clients' assets. Just about a month after its founder Gerald Cotten died, the company which had installed Bitcoin ATMs across major cities in Canada has been shut down. The firm got creditor's protection on 5th January and the Supreme court of Nova Scotia used EY as third party monitors.
Ernst & Young first report
Prior to the second report, EY published their first report on 12th February to inform the court of their activities. The auditors reported that they have received no funds from any of Quadriga's third party payment processors as of that time. However, proceedings to liquidate $25.2 million from a processor noted in Ms Robertson's (QuadrigaCX founder's widow), affidavit has been positive. The monitors also learned from their findings that the firm has approximately $902,742 (Canadian dollar) in its hot wallets on its servers. It was discovered by the auditing firm that QuadrigaCx received 103 BTC (468,675 Canadian dollar worth at the time of the report) which has been inaccessible.
Besides these, the monitor also ''reviewed the motion materials filed by applying counsel in support of their respective motions to be appointed rep counsel for the affected users (QuadrigaCX clients)''. The monitor helped the court with the setup of the proposed rep counsel order. They provided procedures of appointment, factors to be considered and the roles of the rep counsel. The report ended with the terms of the proposed rep counsel order.
Successful transfer of funds in the second report
In their second report published on 20th February, the monitor confirmed that they have received crypto funds from the embattled company. In the first report, they found out QuadrigaCX accidentally transferred a certain amount of cryptocurrency into a cold wallet that became inaccessible for them and their clients. The monitor later learned that the accidental transfer was because of a platform setting error that led to Bitcoin being automatically transferred to QuadrigaCX cold wallets. The monitor, therefore, started discussions with QuadrigaCX management to reveal the location and the amount of cryptocurrency in the company's possessions to arrange for proper transfer into the monitor's cold wallets made available for this purpose. Finally, the company successfully transferred the following cryptocurrency to the monitor.
- Bitcoin: 51.12008035
- Bitcoin Cash: 33.31348647
- Bitcoin Gold: 2,032.65853677
- Litecoin: 822.26686907
- Ether: 951.49917091
Meanwhile, the monitor reviewed the wallet addresses that received the accidental funds and has confirmed that the transfers happened at the time the management reported. In addition, the Quadriga cold wallets still hold approximately 104 Bitcoin as of the time the monitor published the second report.
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