After the exchange's creator passed away in 2018, it was believed that the wallets were inaccessible since he was the only one with access to the private keys.
After being dormant for years, five wallets connected to the now-defunct Canadian cryptocurrency exchange QuadrigaCX have just been seen exchanging almost $1.7 million worth of Bitcoin. Crypto researcher ZachXBT warned the community on December 19 in a tweet, emphasizing the five wallets that sent over 104 Bitcoin BTC to various wallets on December 17.
According to records, the wallets have not sent Bitcoin since April 2018. QuadrigaCX, once Canada's biggest cryptocurrency exchange, filed for bankruptcy in April 2019. After December 2018, Gerald Cotten, the exchange's founder and CEO, passed away; he was the only person in charge of the private keys to the wallets on the exchange. (1)
How this situation came to be
At the time of its bankruptcy, the exchange owed up to $200 million in cryptocurrency to about 155,000 members. According to a study issued in February 2019 by Ernst & Young, one of the Big Four accounting firms in charge of the exchange's estate, on February 6, 2019, QuadrigaCX (2) unintentionally moved around 103 BTC to cold wallets that only the deceased Cotten could access. The amount is nearly comparable to how much Bitcoin has just changed.
The company declared at the time that it would work with management to get the bitcoin out of the cold wallets. The sudden fall that followed the founder and CEO of QuadrigaCX's unexpected death of the transaction had given rise to rumors that the founder staged his demise as an elaborate exit scheme. The tale served as the topic of a Netflix documentary in 2022. Years before he passed away in 2014, Cotten stated on a podcast that printing private keys and keeping them offline in a safety deposit box was the best method to maintain them. This revealed that the exchange had kept its private keys offline in the business's safety deposit box at a bank. It's unclear whether Ernst & Young's recovery attempts are responsible for the movement of the BTC.