The revelation is part of aFeb. 12 update by Ernst & Young Inc., the monitor appointedFeb. 5 by the Nova Scotia Supreme Court to oversee the digitalexchange's restructuring under creditor protection. (Photo:Bloomberg)

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(Bloomberg) –More bitcoin has been caught in the Quadriga CX vortex.

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The shuttered Vancouver-based digital exchange “inadvertently”transferred 103 bitcoins on Feb. 6 to an offline storage accountknown as a cold wallet that was protected by passwords held by thecompany's founder, who died in December, leaving the companyunable to access cryptocurrency valued atC$468,675 ($354,300).

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The revelation is part of a Feb. 12 update by Ernst & YoungInc., the monitor appointed Feb. 5 by the Nova Scotia Supreme Courtto oversee the digital exchange's restructuring under creditorprotection. Ernst & Young didn't disclose how the latesttransfer happened.

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Quadriga sought help after suspending operations in January,saying it was unable to retrieve cryptocurrency and funds owed tosome 115,000 clients following Gerald Cotten's death.

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The company, which Cotten operated primarily from a laptopcomputer, can't retrieve about C$190 million in Bitcoin, Litecoin,Ether and other digital tokens held for its customers, nor can itpay the C$70 million in cash those customers are owed, according toearlier court filings.

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Crypto investors and exchanges often keep their holdings in coldwallets — typically, physical devices disconnected from the webthat can be plugged into a computer when needed sinceinternet-connected hot wallets can be vulnerable to hackers.

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Ernst & Young said it has relied on unaudited financialinformation, Quadriga's books and records, financial informationprepared by the exchange, as well as discussions with theexchange's directors, consultants and legal advisers to prepare thefirst report.

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Report highlights: Quadriga's updated cryptocurrency balances inits hot wallets total C$902,743 as of Feb. 12. The monitor hasn'treceived any funds from third-party payment processors yet; and oneis holding five bank drafts totaling C$25.2 million. Two activelaptops, two older laptops, two active cell phones and two “dead”cell phones, and three fully-encrypted USB keys owned or used byCotten for the Quadriga operations have been retrieved. Ernst &Young has established a toll-free hotline — 1-855-870-2285 — andemail account, at [email protected], to allow creditorsand other interested parties to get additional information on thecourt proceedings.

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