Quadriga CX Dukes It Out with "Failing" Auditing FirmsAugust 17, 2019
Quadriga CX, the crypto exchange in Canada that lost all access to customers’ funds when its founder passed away last year in India, is getting angry at the auditing companies that have been hired to find the missing money.
Quadriga CX Is Still in Hot Water
Quadriga CX head Gerald Cotten allegedly died while working at an orphanage in India in late 2018 due to complications from Chron’s disease. Cotten was the only man with the keys necessary for accessing the funds of customers that were with the exchange, which meant all that money appeared permanently locked out.
Individuals then turned to his wife for answers, who ultimately couldn’t provide them with the data they were looking for. It appeared all executives had failed to retain copies of the keys, and customers immediately sought out means of invoking a class-action lawsuit.
Now, the companies the court has assigned to retrieve the lost money – Miller Thomson and Ernst & Young (EY) – have reportedly lost over $1 million USD in bitcoin this year. As many as 103 BTC units have disappeared since the firms took over, and the companies seem incapable of explaining themselves. Quadriga CX is furious, and many individuals are now seeking different legal representation to get the job done.
In addition, many of the affected creditors and customers are accusing the firm of failing to keep costs down. For all the work that takes place, customers will be required to pay out of pocket for the legal doings. Most of all, the big question on everyone’s minds is, “How do two qualified auditing firms lose that many bitcoins?”
Ali Mousavi, one of the credits, expressed his frustration by saying:
This looks like gross negligence and many of us want to hold EY accountable for what’s happened. Instead of giving us the details, they [struck] a deal with [Miller Thomson] to keep the details confidential and [are] making it harder for us to hold EY accountable… EY was not able to return the funds… It appears that whatever Gerald didn’t manage to steal, EY and MT are stealing. This might not be true, but when you hide the details and charge us millions, that’s how it feels.
Many creditors are also considering their options with outside counsel. Xitong Zou, another creditor, states:
A lot of people want [Miller Thomson] replaced, although I don’t think that’s going to happen.
What Happened with the Lost BTC?
In a statement on Telegram, Miller Thomson partner Asim Iqbal explained that it was a “platform-setting error” that caused the 103 bitcoins to disappear, and it seems the money was transported to wallets that are, at press time, inaccessible. He later stated:
We have provided the detail we are able to provide based on the NDAs and court orders the committee’s and our ability to delve into further details.
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