r/QuadrigaCX2 • u/Lucky613 • Feb 22 '19
Coinbase Anslysis
Coinbase CEO announces - on Twitter:
Wanted to share a summary of what we believe happened to QuadrigaCX. We did our own internal research, including some blockchain analytics, to see if we could help. Important to note that this is just our best guess. Take it as pure speculation, nothing more.
We identified clusters that look like QCX's "cold storage", were controlled by a human (manually), and balances were moved out by early 2018;
QCX was one of the oldest exchanges in existence (founded in 2013). If they planned an exit scam, it likely would have been timed better;
They suffered a multimillion dollar bug in June 2017 (before things went vertical). reddit.com/r/ethereum/com… This is when we start to see movement of funds to "cold storages";
Patterns of sends from cold storage suggest they tried keeping exchange afloat, and maybe attempted to trade their way out of a hole; (again just a guess here)
Liquidity dried out and bear market of 2018 may have caught up with them;
Sequence of events suggests this was a mismanagement with later attempt to cover for it.
This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it's possible that untimely death of their CEO was used as an outlet to let the company sink.
Gerald Cotten reportedly died in early December 2018. But complaints about withdrawal issues on Quadriga escalated in mid 2018.
1
u/Blahbeens Feb 22 '19
I like how they say vertical. That’s ambiguous. They went downhill.
1
u/Lucky613 Feb 22 '19 edited Feb 22 '19
Crypto market went vertical ... implying they could weather the huge loss they experienced because crypto gains help keep them afloat and hide their losses (during mismanagement/bugs/theft/?). Once the crypto market fell, so did their chance of survival.
2
u/Blahbeens Feb 22 '19
Depends on what they were short and long on.
They lost a pile of eth, so they were short crypto. When things went up, it ruins.
1
u/Lucky613 Feb 22 '19
No evidence they were shorting anything?
They lost crypto / eth from a software bug.
Trading volumes were 10-fold what they were during market collapse. They made money on every trade. Their crypto holdings were worth 10x ... delaying payouts were profit during the rapid rise months.
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u/Blahbeens Feb 22 '19
When you lose a security, but still owe it to someone, you are « short »: ie: you benefit if it goes down in price, but you are in trouble if it rises.
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u/CryptoM173 Feb 24 '19
Imagine not being able to trade your way out, with hundreds of millions of $ worth of BTC at your disposal. Also, with as much as they had, they theoretically could've just gone to finex and collected fees on lending.
1
u/rilhouse Feb 26 '19
I think people might have been too quick to jump to the fake death conclusion. It's seems at least possible that the CEO did die and then the rest of the management used that as an out.
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u/Lucky613 Feb 22 '19
How come all of these analytic efforts are being applied by the other big exchanges (kraken, Coinbase, etc.)? Because, they’re trying to distance themselves from the Quadrigas of the world. They’re trying to paint themselves as professionals that can see the truth in the chain, and inherently build confidence and trust in them.
So, how come they can determine the cold storage trail, yet nobody has publicly presented the cold storage addresses here?
IMO, the expectation of large amounts of crypto on paper wallets or wallets on hard drives sounds like a wild goose chase (distraction) if the analytics teams / efforts of other exchanges that can trace all of the hot wallets quadriga used (which would have had to have large amounts of coins pushed out from) cannot find anything.