December 2018, Mr. Gerald Cotten founder of QuadrigaCX Exchange Died in India as the effect of Crohn’s disease ( Reportedly). This eventually Collapsed the exchange operations and more than 70,000 users were affected with their funds stuck.
On Primary Investigations, his wife claimed that all the credentials and details to enter or access these Digital Vaults were Only with Cotten, This Simply means, cryptocurrency worth $190 Mn ( at the time of the incident ) is locked or irretrievable.
The Investigation Involved Affected Users Committee with Lawyers, Ernst & Young Inc for Auditing and now the Affected users are screwed with the Involvement of Canada Revenue Agency (CRA) in the case.
Ernst & Young Inc is the auditing agency officially appointed by the Court to Audit the Collapsed Crypto Exchange records. Further to Primary Investigation and Statement by Cotten’s wife, Ernst & Young said the inaccessible wallets were virtually empty. The Agency also suspects that this can be an act of Fraud or Scam as a result- The rumors of death may have been fabricated also corporate structure and management seems to be mist and scattered. The Users Committee also requested the court to take a Deep dig into Body investigation.
The investigation results so far conclude that only $25.4 Mn are located and “ Probably can be retrieved”. Whereas, about $138 have no trace.
Ernst & Young announced to handover the Customer Database to Canada Revenue Agency (CRA). Personal Information like “account balances and transaction data of affected users.”
Ernst & Young also made a clarification that there was no objection by affected users on sharing the Database to CRA, having the condition by users that the affected “shall have no liability or obligation” on further reports.
It’s also Interesting to note that the Committee people are not very comfortable and are in complete agreement with Sharing this Information as they had agreed on the account of recovering funds. But, the Lawyers appeared again with “extensive debate” on sharing the Personal Information.
Magdalena Gronowska, Committee Member representing Affected Users of Quadriga ( Appointed by the court), made some disturbing tweets about the Data collected.
She Doubts the Intentions of CRA authorities and warns that the Data would be an “incredible coup” to create temptations among the affected users. Gronowska posted, The Tax Agency is leaving nothing and asking for every detail linked, including the KYC.
The Post asked the Regulatory – “ the digital wallet addresses and address mapping; details of all fiat currency sent to or from QuadrigaCX by third party payment processors; details of all transaction data including trades, transfers, balances, and withdrawals; and all banking data uploaded by users to prove their claim to any recovered funds:”
Ernst & Young Also reported earlier that it estimates the QuadrigaCX platform was Intentionally developed and set up to hide the Logs and records at a desirable time. The Complete Accounting Practice and the Corporate Structure of the System is disorganized.
The suspicion increased when it is found that there are also hints and Evidence of Fake accounts with Fake Names and unaccounted transactions made by Cotten.
It’s Now Much awaited topic and a Challenge for the Supreme Court and Crypto mainstream to organize the proper working of laws and regulations in such cases that can also happen in the future.