💀 Back From The Dead

Market Meditations | December 29, 2022

Last year we ran a special on what happens to your crypto after you die. We linked it to the reported “death” of Gerald Cotten, who took with him the private keys to ~$250 million. Hidden in plain sight, QuadrigaCX exchange deposits would be forever suspended in an unreachable pocket of the blockchain. Or so we thought…

  • Over a 20-minute period last Saturday, ~104 BTC was moved from dormant QuadrigaCX wallets. Having not been moved for 3 years, the coins from the 5 wallets are now worth ~$1.7 million.
  • Crypto detective ZachXBT reported that ~70% of the funds were sent to Wasabi. This is a non-custodial wallet designed to obfuscate transaction history and user identity.
  • QuadrigaCX went into bankruptcy in 2019 after the death of their CEO. Ernst & Young were appointed as the Trustee for the distribution of assets to creditors, but could only fill ~20% of the claims.
  • In a statement released yesterday, the accounting firm said they were “aware of an unauthorized movement of bitcoin from certain cold wallets held by Quadriga“. They denied initiating the transfers but expressed hope the funds could still be recovered.
  • In a reaction to Zach’s tweet, Quadriga’s other co-founder Michael Patryn shone the light on someone else. Under his 0xsifu handle, he claimed their developer, Alex, had been instructed by Ernst & Young to send the funds. This was later claimed to have been a mistaken transfer to inaccessible wallets.