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Ernst & Young (EY) Loses Over 100 Bitcoins for QuadrigaCX Victims

Aug 16, 2019
byOmar Abbas

Former clients of what was once Canada’s largest cryptocurrency exchange, QuadrigaCX, have begun to lose patience with their court-appointed advisory firm and lawyer to assist creditors with recovering their US$190 million owed to them after CEO Gerald Cotten allegedly died after his trip to India. But creditors are now shaking their heads after Ernst & Young (EY) “inadvertently”lost 103 bitcoins six months ago. According to CoinDesk, 103 bitcoins were accidentally sent to wallets whose private keys were only known QuadrigaCX’s late founder; meaning there’s no way of ever recovering those bitcoins. Those 100+ coins are now worth about US$1 million.

The Nova Scotia Supreme Court appointed Ernst & Young (EY) as the lead auditor to attempt to recover all or a portion of the clients’ funds and, along with law firm Miller Thomson as legal counsel to represent the clients’ best interests.

Ali Mousavi, one of QuadrigaCX’s creditors, told CoinDesk that, “This sounds like gross negligence to us and many of us want to hold EY accountable for what happened.” Mousavi added that “Instead of giving us details, they [struck] a deal with [Miller Thomson] to keep the details confidential and [are] making it harder for us to hold EY accountable.”

Another previous QuadrigaCX user, Matt MacPherson, told CoinDesk he was very disappointed with Miller Thomson mainly because they “won’t even acknowledge any fraud whatsoever took place.” MacPherson was referring to Cotten’s alleged use of customer funds to conduct margin trading of cryptocurrency, as well as buying goods & services for personal use including real estate, private jet, yacht, and luxury vehicles.

To date, EY has recovered US$25 million and is looking to raise an additional US$9 million by selling Cotten’s personal assets that EY claims he purchased with clients’ money on the exchange.

In a Telegram chat group for Quadriga creditors, Asim Iqbal, Associate with Miller Thomson, told the group that a “platform-setting error”was the reason behind the loss of 103 bitcoins which were accidentally sent to private wallets that are inaccessible.