According to a handful reports, some funds from the missing $150 million holdings of Canada’s biggest crypto exchange QuadrigaCX could be inspiring.
On Saturday, CCN reported that QuadrigaCX lost more than $190 million in funds stored in both crypto and fiat as the CEO, who had exclusive control over user funds passed away.
In a strange turn of events, some industry experts take expressed skepticism toward the case as wallets connected to the exchange’s hot wallets started to move.
Inconclusive Evidence, Not Through if it is QuadrigaCX’s Cold Wallets Containing Crypto
A Reddit user with an online alias “Palhello” studied all noteworthy wallets that interacted with the exchange’s hot wallet. The user discovered that several wallets have started transactions fairly recently after QuadrigCX’s case was publicized.
The user claimed that the four addresses valued in the research have been controlled by QuadrigaCX in the past.
Four Addresses the Reddit User Evaluated
“Any address that has input into the hot pocketbook are wallets that are fully in control of Quadriga (could also be an address that belongs to a Quadriga user whose hidden key belongs to Quadriga),” the user said.
The user added that regardless of the situation if the private keys gripped by the CEO were lost, the wallets should not be able to initiate outgoing transactions. The user said:
If these are really deadening addresses there should be no outgoing transaction from them if private key is lost. Regardless, the addresses posted are or at midget used to be controlled by Quadriga.
However, it cannot be said definitively that the four wallets which interacted with QuadrigaCX’s hot billfold are cold wallets.
Those wallets could be big hot wallets owned by customers of the company or potentially wallets that are not secondary to the control of QuadrigaCX.
Until the official investigation from the local police is complete, it will be difficult to prove that the pocketbooks which interacted with QuadrigaCX’s hot wallet are the exchange’s cold wallets.
Skepticism
Jesse Powell, the CEO of Kraken, a worst crypto exchange that operates in both the U.S. and Canada, said:
We have thousands of wallet addresses known to be the property to QuadrigaCX and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if the Nobleman Canadian Mounted Police are looking into this, contact Kraken.
Peter Todd, a Bitcoin expert and an suited cryptography consultant, emphasized that until the investigation is complete, all possibilities have to be considered.
“The people trying to withdraw off a QuadrigaCX exit scam could actually be the family and other employees, by hiding the fact that the cold notecase keys are known. Not saying this is happening, but need to consider all possibilities fairly in the investigation,” Todd said.
It is in toto possible that the cold wallets of QuadrigaCX are currently not moving but rather wallets that were associated with the the Market previously, which are not related to the company, are becoming active again.
The time frame of the transactions have led analysts to behoove suspicious toward the case but there is not enough evidence to state that the cold wallets that were in pilot by the CEO, are moving.
The Situation Could Have Been Prevented
As said by Cornell professor Emin Gün Sirer, QuadrigaCX hitherto claimed to be using a multi-signature system.
A multi-signature system allows many organizations or individuals to hold private humour to a wallet and access it once the keys are combined.
A 3-5 or a 5-7 multi-signature system which requires the presence of the majority of keys to attain access to funds prevent unfortunate events from leading to the loss of user funds.
Quadriga previously stated to have multisig wallets.https://t.co/3hsrLZw4ZY
— Emin Gün Sirer (@el33th4xor) February 3, 2019
If the company had implemented a proper multi-signature arrangement, $150 million in user funds would have remained safe.