Funds lost to irrecoverable password turn out to be missing altogether as auditors investigate the company’s financials.
Questions have been raised by auditors after digital wallets expected to contain millions in cryptocurrency were found to be empty following the death of Quadriga CX founder Gerald Cotten.
Mr Cotten, 30, died “due to complications with Crohn’s disease” while travelling to open an orphanage in India in December, according to his wife Jennifer Robertson.
He held “sole responsibility” for handling the $190m (£110m) his company looked after, and no other members of the Canada-based QuadrigaCX team could access the stored funds, according to Mrs Robertson.
She said the cryptocurrency and normal money was in “cold storage” – where the company, or just Mr Cotten in this case, holds the key, not the client.
Auditors Ernst & Young, who were brought in to help recover the cryptocurrency, managed to gain access to Mr Cotten’s laptop, but discovered that the digital wallets held there had been emptied in April 2018 – eight months before his death.
It also noted 14 suspicious user accounts had been created on the Quadriga trading platform outside of the normal process for creating client accounts.
These accounts had been involved in trading and withdrawing cryptocurrency to addresses not associated with Quadriga, and the auditors are currently examining the transaction histories.
The news may provide hope to QuadrigaCX customers who have been complaining on social media that they have not been able to withdraw money from their accounts.
Ally Shapoval wrote: “Hello, Quadriga! I withdrew money from my Quadriga account to my bank more than 2 weeks ago. WHERE IS MY MONEY? STILL NOT THERE.
“I sent you emails, you are not responding.”
Another wrote in French: “I have sent lots of emails, but I just get automatic responses, I’m not even able to get my crypto out.”
Some are questioning whether Mr Cotten is even dead and others have accused the company of lying to them