Mystery Hacker Walks Away with $200 Million in QuadrigaCX Bitcoin

• Over 100 bitcoin belonging to collapsed crypto exchange QuadrigaCX has left wallets tied to the exchange, with a majority flowing through a privacy tool.
• QuadrigaCX collapsed in January 2019 after its founder apparently passed away in India and it was revealed that the exchange owed thousands of customers around $200 million in crypto.
• Ernst and Young, the company’s bankruptcy trustee, revealed it had accidentally sent over 100 bitcoin to Quadriga’s cold wallets which it could not access. Last Friday, someone pulled all 104 BTC out and moved at least 70 or so of that to Wasabi Wallet, a privacy service.

In January 2019, the crypto world was stunned by the collapse of QuadrigaCX, a Canadian crypto exchange. The exchange’s founder and CEO, Gerald Cotten, had apparently passed away in India due to complications from Crohn’s disease. It later came out that the exchange owed thousands of customers around $200 million in crypto.

Ernst and Young, a Big Four auditor, was appointed as the company’s bankruptcy trustee and has spent much of the last few years investigating Quadriga, trying to find the company’s assets and recover what funds it could. The Canada Revenue Agency is also digging into Quadriga, checking on taxes the exchange may not have filed when it was operating.

In February 2019, EY revealed it had accidentally sent over 100 bitcoin (BTC) to what it described as Quadriga’s cold wallets, which it could not access. Last Friday, someone pulled all 104 BTC out. And promptly moved at least 70 or so of that to Wasabi Wallet, a privacy service. This implies that someone hacked the wallets of the collapsed exchange, raising further questions as to who is behind this and where the funds are going.

EY confirmed it wasn’t anyone on the auditor’s team, leaving the crypto community to speculate who the perpetrator might be. Many have suggested it might be an insider or an entity with access to Quadriga’s private keys.

It is still unclear what the implications of this news are for the creditors of QuadrigaCX. EY is still trying to trace the funds, but the fact that the funds were moved to a privacy wallet makes it difficult to track. The news has also reignited discussion around the dangers of centralized exchanges and the importance of keeping private keys safe.

It is likely that the funds will never be recovered, and it is a stark reminder of the risks of investing in crypto, particularly with centralized exchanges. QuadrigaCX is a cautionary tale, and one that will be remembered for years to come.