QuadrigaCX likely lacked any ETH cold wallets, per report | Mapping out the non-fungible token ecosystem
|Feb 8||Public post|| 5|
“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so.” — Robert J. Jackson Jr, SEC Commissioner on Bitcoin ETF approval
The Big Block
Blockchain analytics company Elementus concluded that QuadrigaCX likely didn’t have any Ethereum cold wallets, following a deep investigation of QuadrigaCX wallets viewed by The Block.
QuadrigaCX was granted creditor protection this week to settle debts which came into light following the sudden death of the firm’s CEO and founder, Gerald Cotten. Cotten was supposedly the only person with access to the exchange’s private keys, so his passing would make the entirety of the exchange’s cryptocurrency reserves irrecoverable. The exchange currently owes $190 million to its 115,000 customers and a Canadian judge has given them 30 days to find the missing funds.
After analyzing wallets that belonged to QuadrigaCX, Elementus is confident that no Ethereum cold wallet existed. A cold wallet is identified by looking at currency movement patterns.
At a normally functioning cryptocurrency exchange, an excess in deposit/hot wallets is consistently being sent to cold wallets. When customers initiate a withdrawal without enough funds in hot wallets, cold wallets start sending the funds to the hot wallets. The user may then withdraw the funds from the hot wallet directly to their personal wallet.
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Around The Block
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Remember Noble Bank?
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