Scams

Could the Reported Death of QuadrigaCX’s CEO Be A Front for An Exit-Scam?

Could the Reported Death of QuadrigaCX’s CEO Be A Front for An Exit-Scam

The mystery surrounding QuadrigaCX’s supposedly lost cold wallets seemed puzzling enough when Toshi Times last reported on it. It would now, however, seem that the plot thickens even more – as reports start to come in alleging that funds have been moved from these ”lost” wallets.

QuadrigaCX’s CEO was supposedly the only one to hold crucial private keys

For those who have yet to catch up on this story, QuadrigaCX is Canada’s premier cryptocurrency exchange. Although the company has struggled with financial problems for the better part of 2018, this all came to a head when QuadrigaCX’s CEO, Gerald Cotten, passed away in India on December 9th.

QuadrigaCX subsequently released a statement detailing that Cotten had been the only person to hold the private keys to wallets containing $250 million worth of customer funds.

Ledger Nano S - The secure hardware wallet

However, some were not entirely convinced by this statement – with some individuals even suggesting that Cotten may in fact not even be dead at all. Following this, skeptical observers got to work using the internet, and quickly gathered ”evidence” for inconsistencies in the official statement.

Funds have now been moved from ”lost” cold wallets

For example, a Reddit user has since found that QuadrigaCX’s Litecoin cold wallet addresses, which were supposedly lost, have recently been activated and funds have been withdrawn.

Some Reddit users speculated that this could potentially indicate that Cotten’s supposed death was merely the front for an exit-scam. Nevertheless, commenters were quick to point out that it could just as likely be an individual who had gotten their hands on the private keys and did not want to share the funds.

Moreover, a separate investigation has reportedly found that there ”were no cold wallet reserves” when examining the firm’s Bitcoin holdings. This investigation also went on to question QuadrigaCX’s official story, stating that it did not appear that the exchange had ”lost control” of any Bitcoin holdings.

QuadrigaCX’s official website still states that the company is working ”extensively to address [its] liquidity issues, which include attempting to locate and secure [its] very significant cryptocurrency reserves held in cold wallets.”

Nevertheless, a post on the official QuadrigaCX website notes that these efforts have – so far – been unsuccessful. All in all, it seems as if it might take some time before the ordeal is resolved.

QuadrigaCX’s customers will no doubt be both frustrated with the exchange and well as worried regarding a potential exit-scam, and it remains to be seen whether the company can instill increased customer confidence while it works to resolve this affair.

Image Source: “Flickr”

Ledger Nano S - The secure hardware wallet