Yesterday, Gizmodo reported Crypto Exchange Says It Can't Repay $190 Million to Clients After Founder Dies With Only Password.

Canadian crypto exchange QuadrigaCX says it cannot repay most of $190 million in client holdings after its 30-year-old founder Gerald Cotten, the only person who knew the passwords to its “cold storage,” unexpectedly died in India in December 2018, Coindesk reported on Friday.

In a sworn affidavit with the Nova Scotia Supreme Court, widow Jennifer Robertson said that QuadrigaCX owes its customers some $190 million in both cryptocurrency and fiat money. QuadrigaCX has filed for creditor protection because it says it cannot access the funds stored in “cold storage,” just the comparatively smaller amount in a “hot wallet” used for transfers, CoinDesk wrote:

The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million, according to the affidavit.

QuadrigaCX Never Held $100M In Bitcoin, Says Crypto Researcher

Today, BTC News reports QuadrigaCX Never Held $100M In Bitcoin, Says Crypto Researcher

Surprise! The craziest crypto-related story of 2019 has just become a tad zanier. According to a research piece from a leading industry researcher, QuadrigaCX, a Canadian Bitcoin (BTC) exchange in the midst of a multi-month imbroglio, could have been fibbing about its cryptocurrency holdings — and by a large sum at that.

For those who missed the memo, QuadrigaCX, once Canada’s largest and most popular BTC-focused exchanges, has long been under pressure. As reported by NewsBTC last year, the Canadian Imperial Bank of Commerce (CIBC) froze five accounts that were linked to Costodian Inc., Quadriga’s payment processor, and Jose Reyes, its owner. It was reported that $28 million was frozen, leaving hundreds of the platform’s customers stranded, and strapped for funds.

Crypto Medication, a researcher and data analyzer responsible for a number of key exposés, recently took to Zerononcense, a crypto-centric publication he heads, to divulge his analysis of this debacle.

Long story short, through the use of in-depth blockchain analysis, Medication determined that QuadrigaCX never lost access to its Bitcoin holdings, along with the fact that that the BTC sum cited in the affidavit likely isn’t accurate. No conclusive figures could be pinned, but the researcher also divulged that Quadriga enlisted the use of fractional reserves to service its customers, using client deposits to issue withdrawals.

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Crypto Medication

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The fraud and scams continue.

Also see my Mindless Crypto Action report yesterday in which Empower Coin blasted from a value of $500 to $619 million back down to $500 in a matter of a few days.

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