Even with the advancement in cryptocurrency and the underlying blockchain technology, many exchanges are still vulnerable to attacks from bad actors. A while ago, the largest cryptocurrency exchange in Canada, QuadrigaCX, reported that its accounts were hacked and more than $190 million from its cryptocurrency and fiat holdings were stolen. Now, media outlets are reporting that the missing funds may be on the move.
QuadrigaCX’s Missing $150 Million In Cryptocurrencies May Be On The Move
On Saturday, smartereum.com posted a report about how a hacker took over user accounts on the exchange and made away with cryptocurrencies and fiat money worth over $190 million right after the CEO of the company died. Keep in mind that the CEO was the only one with unlimited access to these funds. Yesterday, some experts in the cryptocurrency industry suggested that some of the cryptocurrencies that were stolen, about $150 million was being moved.
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The news started to circulate after a Reddit user with the handle ‘Palhello’ conducted a study on all major cryptocurrency wallets that had interactions with QuadrigaCX’s hot wallet. He concluded that many different wallets started initiating transactions right after the hack was made public. According to the Reddit user, four out of all the addresses involved were formally controlled by the cryptocurrency exchange. In Palhello’s words:
“Addresses that have input into the exchange’s hot wallets that are in being controlled by QuadrigaCX could also be addresses that belong to users of the exchange who have private keys belonging to QuadrigaCX.”
Palhello insisted that even if the CEO’s private keys were lost with his demise, the wallets shouldn’t be able to prompt transactions. If the addresses are cold as the exchange suggests, no outgoing transaction should have come from them even if the private key is lost. While the user is sure that the four wallets were at one time controlled by QuadrigaCX, he wasn’t sure if the wallets were all cold wallets. There is the possibility that these wallets are hot wallets just like Quadriga’s main wallet. It’s possible that they are owned by customers of the exchange and are no longer in the control of QuadrigaCX.
Right now, the local police is investigating the issue. Until the investigation is over, it will be hard to determine that these wallets actually interacted with the company’s hot wallet. It’s also not clear if these wallets are the company’s cold wallets. Nothing is conclusive for now.
Jesse Powell And Peter Todd Talk About The QuadrigaCX Incident
The CEO of another cryptocurrency exchange, Kraken, has aired his opinion on the matter. According to Jesse Powell, the story is bizarre. In his words:
“There are thousand of addresses associated with QuadrigaCX and we are investigating this unbelievable and bizarre story about how the CEO died with the private keys. I don’t usually call for subpoenas but Kraken will be available if the Royal Canadian Mounted Police is considering this.”
Another cryptocurrency expert, Peter Todd, said that no possibility should be removed until the investigations are complete. In his words:
“Those trying to pull off an exit scam at QuadrigaCX could be family members of the CEO or employees who are hiding the truth about the cold wallet private keys. I am not saying that this is what is happening but every possibility should be considered until after the investigation is complete.”
The bottom line is that the company didn’t have a proper security system. If there was a 3-5 or a 5-7 multi-signature system available, it would have been impossible for users to lose their funds the way they did.
Do you think the hack on the exchange was an inside job? Share your thoughts in the comment section.