FBI reaching out to users of the defunct QuadrigaCX cryptocurrency exchange

HALIFAX — The FBI has stepped up its investigation into the demise of Vancouver-based QuadrigaCX, which was one of Canada’s largest cryptocurrency exchanges before it was shut down amid a storm of controversy.

The victims services section of the FBI has posted a survey on its website asking potential victims to voluntarily disclose details about their account balances, transactions and other financial records linked to the $200-million fiasco.

“Based on the responses provided, you may be contacted by the FBI and asked to provide additional information,” the agency said Monday in an introduction to the online form.

The cryptocurrency industry, which trades in digital assets like Bitcoin, Litecoin and Ethereum, is not regulated or subject to industry oversight in Canada. QuadrigaCX clients were scattered around the world.

The FBI survey asks for user names, email confirmations for transactions, details about each user’s most recent transactions, deposit addresses, withdrawal requests and so-called hot wallet addresses.

A hot wallet refers to cryptocurrencies that are stored on a computer server connected to the internet, which makes for easy transfers and trading.

However, most digital assets are typically stored in cold wallets, kept on USB flash drives or laptops that are kept offline to prevent hacking.

In early March, the accounting firm Ernst and Young said several of QuadrigaCX’s cold wallets had been found, but all of them were empty.

As well, the accounting firm said it had determined QuadrigaCX’s lone director — 30-year-old Gerald Cotten of Fall River, N.S. — was mixing his personal and corporate finances, and that 14 user accounts had been created with aliases to draw from deposits that “may have been artificially created.”

The FBI says it is legally bound to identify victims of the federal crimes that it investigates and provide them with information and assistance.

The American investigation includes resources from the Internal Revenue Service, the U.S. Attorney’s Office for the District of Columbia and the computer crime section of the federal Justice Department.

The QuadrigaCX trading platform stopped operating Jan. 28, more than a month after Cotten died suddenly while travelling in Jaipur, India. His widow, Jennifer Robertson, has said Cotten died from complications linked to Crohn’s disease.

Soon after Cotten’s death was announced, Robertson produced an affidavit in Nova Scotia Supreme Court saying her late husband was the only QuadrigaCX employee who knew the encrypted pass codes needed to get at $190 million in cryptocurrency.

At the time, she said about 115,000 QuadrigaCX users were also owed $70 million in cash, much of which was tied up in bank drafts and accounts held by several third-party payment processors.

As of April, QuadrigaCX and its associated companies owed creditors $215.7 million, according to Ernst and Young, which is now overseeing bankruptcy proceedings.

The accounting firm confirmed in a report last month it had recovered only $28 million in assets — virtually all of it in cash.

As well, Ernst and Young said it might not be possible to complete a full review of QuadrigaCX’s finances, mainly because of the company’s poor bookkeeping and lack of co-operation from its business partners.

The firm has said it is making progress in retrieving funds from QuadrigaCX’s payment processors and other exchanges, and it plans to file an investigation report within the next two months.

A total of 76,319 unsecured creditors — virtually all of them QuadrigaCX clients — have come forward to claim they are owed $214.6 million.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

New highway to B.C. proposed

The Howse Pass shortcut to British Columbia is worth taking another look… Continue reading

Red Deer RCMP execute search warrant

Heavy police presence on Nash Street

Health care coalition calls on government for pharmacare funding in next budget

OTTAWA — A coalition of 150 health care organizations and non-profits is… Continue reading

Telus and affiliates tell customers they’ve already met Liberal rate-cut pledge

OTTAWA — One of Canada’s major mobile service providers appears to have… Continue reading

Five things to watch for in the Canadian business world in the coming week

TORONTO — Five things to watch for in the Canadian business world… Continue reading

Your community calendar

Feb. 6 A Perogie Supper is being held Thursday, Feb. 6 from… Continue reading

Reader’s opinion: Here’s how Premier Kenney can build a stronger Alberta

Apparently, the UPC government has decided that most seniors should pay more… Continue reading

Canadian snowboarder Blouin wins World Cup gold in women’s slopestyle

CALGARY — Laurie Blouin couldn’t wipe the smile off her face after… Continue reading

Alberta skip Laura Walker’s change of heart gets her to first Hearts

MOOSE JAW, Sask. — Laura Walker wasn’t going to curl with a… Continue reading

Catherine Reitman says there’s a ‘real hunger’ for shows like ‘Workin’ Moms’

TORONTO — Some six years ago, when Catherine Reitman was creating her… Continue reading

Museum’s Rembrandt knockoff turns out to be the real thing

ALLENTOWN, Pa. — Thanks to modern technology and some expert detective work,… Continue reading

Woman loses 50 pairs of shoes after boyfriend accidentally donates them to thrift store

Cassandra Converse can’t wait to go shoe shopping. Last month, Converse’s boyfriend… Continue reading

RDC Queens fall in double OT to MacEwan University Griffins

Griffins 4 Queens 3 (2OT) The RDC Queens managed to salvage a… Continue reading

Most Read