MyCrypto CEO Suggests That QuadrigaCX Doesn’t Have An Ethereum Cold Wallet: Where Did The $150 Million Go?

The QuadrigaCX disaster is still being investigated. Until now, local authorities have been unable to discover how the $150 million in cryptocurrencies were moved from the exchange neither have they figured out who moved the funds. Some experts in the industry suggested that this may have been an inside job accomplished by relatives of the CEO or employees. Right now, nothing is conclusive.

MyCrypto CEO Suggests That QuadrigaCX May Not Have A Cold Storage

Airing her opinion like other experts, the CEO of MyCrypto, Taylor Monahan, said that it is possible that the cryptocurrency exchange, QuadrigaCX, doesn’t have a cold Ethereum wallet. You’ll recall that some experts suggested that the missing funds may have been moved to the cold Ethereum wallets of the exchange. Following an evaluation of QuadrigaCX’s Ethereum addresses, Monahan said that there is a possibility that the addresses involved were all owned by clients and not the exchange. In her words:

“I can’t see any indication that QuadrigaCX ever had a cold wallet for Ethereum. I have evaluated their three main addresses:

0x027beefcbad782faf69fad12dee97ed894c68549 (green)

0x0ee4e2d09aec35bdf08083b649033ac0a41aa75e (blue)

0xb6aac3b56ff818496b747ea57fcbe42a9aae6218 (purple – active)”

Normally, large cryptocurrency exchanges store the bulk of their funds on cold storages that are not connected to the internet and cannot be accessed by online hackers. They also implement sophisticated systems for safeguarding their holdings on cold wallets to protect users. Whenever funds have to be removed from the cold storage, these exchanges plan the process for months to minimize technical mishaps.

The three main addresses of the exchange that were evaluated by Taylor Monahan were used to send funds to other cryptocurrency exchanges like Poloniex, and Bitfinex. Since cold wallets usually deal with large sums at a time, and millions in ETH was sent from these wallets quickly, they are most likely not cold wallets. This leaves everyone wondering where the $150 million in cryptocurrencies were moved to.

Monahan said that she hasn’t evaluated the main QuadrigaCX Ethereum wallet which is said to have more than 500,000 transactions under its belt. She continued:

“Oh, incase you were shaking your head in disappointment, remember that the exchange had KYC. So, they have loads of KYC data from customers. This means that it is possible for employees to move the money by using the KYC data they have access to.”

QuadrigaCX Didn’t Use A Multi-signature Security System

The CEO of QuadrigaCX, before his death, claimed that the exchange had an active multi-signature system in place to protect funds. This system gives different individuals and groups access to the private keys of a given address. This address cannot be accessed by only one party at a time. Funds will only be accessible when all the individuals are in consensus.

Ethereum (ETH) Price Today – BTC / USD

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Recent events show that the exchange didn’t have this security measure in place. This is because it now claims that the CEO was the only one with full control of the funds. This is discouraging and can potentially remove the exchange from business. There is still a lot of skepticism in the cryptocurrency community about the incident. Yesterday, reported that the CEO of Kraken aired his opinion about the QuadrigaCX Disaster.

Do you think the exchange stored all the funds in hot addresses as Monahan suggested?

Ufuoma Ogono is a cryptocurrency writer with over 3 years experience in the cryptocurrency industry. She dedicates her time to sharing valuable information to members of the cryptocurrency community.


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