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QuadrigaCX: Redditor claims exchange used to trade against its customers without assets to back them

Priya

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QuadrigaCX used social media to trade against its own customers without assets to back them, claims Redditor
Source: Unsplash

Earlier this year, QuadrigaCX, a Canadian exchange had grabbed headlines after the untimely death of its CEO, which led to a large amount of funds becoming inaccessible. The exchange is now back in the news after allegations of trading against its own customers.

The exchange became a common name in the crypto-space after it claimed to have lost access to its cold wallets after CEO Gerald Cotten’s death. It was claimed that Cotten alone had access to these cold wallets, following which the exchange faced a loss of $190 million, owned by around 115,000 customers.

Adding fuel to the fire, a Reddit user, theSentryandtheVoid, alleged that the exchange used to trade against its own customers. The Redditor stated that the exchange created fake accounts, which were then used to trade against its own customers. More so, these trades were executed without any assets to back them.

The Redditor said,

“I haven’t seen anyone commenting on this yet, but this is probably the most incendiary information revealed from this whole sordid process to date. Even worse than shipping all the crypto to trade with on other exchanges, even worse than the cold wallet balances being 0.”

Source: Reddit

Source: Reddit

Public Information on Quadriga Fintech Solutions Corp | Source: Sedar

Public Information on Quadriga Fintech Solutions Corp | Source: Sedar

The Redditor’s claims were backed by a Cornell University Professor, Emin Gun Sirer, who said,

“Turns out that QuadrigaCX traded against its own users, and in the crypto world, this is seen as a totally normal thing that just happens at pretty much every exchange.”

–mv–another Redditor said,



“All possible ways to scam clients, create fake volumes and have more clients signup/deposit money in the exchange. This should be a criminal case/investigation and Interpol search for Gerald, assets freezing for all owners/co-founders and maybe close relatives.”

Barsoapguy, a Reddit user said,

“this is a par the course for a lot of exchanges .No one should be surprised by this …oh wait none of you ever bothered to do even the least bit of due diligence when it comes to crypto.”

Earlier this week, the exchange was in the spotlight again after the wife of the deceased CEO demanded repayment of $300k in court, citing legal and managerial costs. The exchange platform was also granted an extension of 45 days to recover the missing funds by the Nova Scotia Supreme Court Justice.





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Technology

Cryptopia: New Zealand Court grants 10 extra working days to present its first liquidators report

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Cryptopia: New Zealand Court grants extra 10 working days to present its first liquidators report
Source: Unsplash

Cryptopia, the defunct New Zealand cryptocurrency exchange, announced that there was an update with regard to the first liquidation report. The exchange stated that the New Zealand Court grated the platform ten extra days to present the report, with the date now scheduled to 4th June 2019.

The exchange stated on its official Twitter handle,

“The New Zealand Court has granted a 10 working day extension on the initial Cryptopia Ltd Liquidators report. It is now due on 4 June and will be available on the New Zealand Companies website when it is submitted”

Sean Crypto Phillips, a Twitter user stated,

“I hope that the liquidators understand that the coins are funds held in trust, not general assets of Cryptopia, so should be returned in full and without conversion. Also, I will be interested in any news of recovery from amounts sent to Huobi, although my balance was intact.”

Currently, the exchange’s website continues to be under maintenance, with the site displaying the press release pertaining to the liquidation process. According to that announcement, the liquidation process is handled by David Ruscoe and Russell Moore, representatives of Grant Thornton.



The exchange had decided to take this path because of the security breach that occurred earlier this year in January. Notably, the exchange fell victim to two attacks with the hacker gaining control over all of its Ethereum funds. At present, “the liquidators are focusing on securing the assets for the benefit of all stakeholders.” The investigation conducted by Grant Thornton was reported to take months instead of weeks, with the first report set to be released in the coming month.

Aside from this, the exchange also made headlines when the attacker had started to move the stolen Ethereum funds to different wallets and exchanges, which includes Huobi and EtherDelta. Huobi, a leading centralized exchange, released a statement concerning this incident on its official social media handle. The platform stated that the stolen funds were automatically detected by its system, following which it was immediately frozen.





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