There was speculation that the deceased owner of the now defunct canadian crypto currency exchange QuadrigaCX withdrawal of funds users of the exchange and used them for margin trading on other venues. Such information is presented in the fifth report of the trial observer of Ernst & Young for the Supreme court of Nova Scotia from June 19.
As noted by the auditor, at the exchange were “serious shortcomings from the point of view of financial reporting and operational control”.
In addition to the fact that most of the tasks performed himself lost co-founder Gerald Cotten, according to EY, the company had no segregation of duties nor the basic internal controls, no segregation of the assets of the Fund Quadriga from the user means.
Thus, according to the report, the Quadriga was virtually no profit. And custom the money was kept mixed with the other funds.
See also: Died the founder of QuadrigaCX. Now the crypto currency exchange is not able to find $ 145 million.
Significant amounts of cryptocurrency was transferred outside Quadriga in a competitive exchange. To be more precise, to the personal accounts belonging to Cotto. Apparently, Cotten used the custom money for trading and to support their margin trading account.
According to the auditor, that led to “inflated earnings, artificial transactions with users of the exchange and the subsequent withdrawal of deposited funds beyond the exchange.”
At some point, Cotten suffered significant losses while trading on competitive markets, which subsequently had a negative impact on the cryptocurrency reserves Quadriga.
At the moment, was able to calculate the following money transfers to neighboring exchanges with wallets Quadriga: 9450 BTC, 387738 ETHand 239029 LTC.
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