The case of the curious crypto exchange, and its quick collapse, deepens.
Bloomberg reports that a slew of regulators and investigators are looking into QuadrigaCX’s shuttering of operations earlier this year. The roster of investigators includes the Federal Bureau of Investigation (FBI), the Department of Justice’s Computer Crime and Intellectual Property Section and the U.S. Attorney’s Office for the District of Columbia.
The FBI, in particular, is asking users of the exchange if they had used “identifying information” when opening accounts with the crypto exchange, and whether those users had conducted fund transfers through financial firms that are based in the United States.
As has been widely reported, the exchange – now moving through bankruptcy proceedings in Canada – went dark in January after Founder Gerald Cotten died. The exchange’s customers, numbering more than 115,000, have been unable to access $195 million in crypto and cash holdings.
Questionnaires on offer from the FBI seek voluntary responses from victims, which the Bureau said would be “useful in the investigation and to identify you as a potential victim.”
“The FBI and IRS-CI are legally mandated to identify victims of federal crimes that they investigate and provide these victims with information, assistance services and resources,” according to a statement from the investigators, as reported by Bloomberg. Those investigators join the Ontario Securities Commission, which said in February that it was looking into “potential harm to Ontario investors.”
As noted in this space earlier in the year, the case traces its roots back to February, when QuadrigaCX could not locate $190 million in crypto held on behalf of clients. That’s because Cotten, who died in India in December of 2018, was the only person who knew the passwords to “cold storage.”
In at least one bit of movement on the case, in March, EY identified six bitcoin cold wallet addresses it claimed Quadriga used – and which held $400,000 worth of bitcoin. EY had been acting as the court-approved monitor for the exchange, which filed for protection in January and entered bankruptcy proceedings in April.
CoinDesk reported in March that Cotten’s widow. Jennifer Robertson, had said Cotton used his own cash to make customers “whole” during a legal battle with a bank. The Canadian Imperial Bank of Commerce froze QuadrigaCX holdings last year over what CoinDesk reported were questions about their origin.
In another bit of intrigue, around $21,000 CAD ($16,000 USD) had been deposited to Quadriga’s hot wallets since its initial filing on Jan. 31.
EY said the exchange has roughly $21 million in assets (including fiat currencies). That would mean that the defunct exchange could owe customers $160 million, according to reports.