The sudden death of founder chief executive in December of Canada’s largest cryptocurrency exchange Quadriga has resulted in about cryptocurrency worth roughly $190 million missing, the company is set to approach a court in Canada to seek creditor protection.
It has been reported that the sole access keys to millions of dollars belonging to the company’s clients has been cut off with the sudden death of the founder, chief executive and sole director of Quadriga - Gerald Cotten at the age of 30.
“A visionary leader who transformed the lives of those around him, Gerry died due to complications with Crohn’s disease on December 9, 2018, while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need,” the company said in a post on its website and Facebook.
Users of the company were allowed to deposit cash or cryptocurrency,. The company was established in December 2013. Users could then sell cryptocurrency or traditional currency and then deposit it to their bank accounts. This form of service is useful for those bitcoin and other cryptocurrency owners who are most often not able to use them for purchasing goods or services.
Following this debacle, the company has completely shut down the exchange.
Following the death of Cotten, cryptocurrency worth about $190 million were unable to be located by Quadriga employees according to court filings as reported in the media. Cryptocurrency within Quadriga’s “cold” wallets were attempted to be accessed by employees. A “cold” wallet is a system which enables offline storage of cryptocurrencies offline to prevent hacking such as using USB sticks or electronic hardware which are never connected to the internet.
“Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units,” it said in court filings.
The laptop used by Cotten is encrypted and that she was not involved in the business, said Cotten’s ’s widow Jennifer Robertson.
“I do not know the password or recovery key,” she said in an affidavit according to the media. “Despite repeated and diligent searches, I have not been able to find them written down anywhere.”
An application for creditor protection on Jan. 31 was filed by the Vancouver-based exchange. The company also said that $70 million in currency is owed by the company. It also owes an additional amount of cryptocurrency worth at about $180 million, calculated on the basis of market prices of the currencies in December. Those cryptocurrencies belonged to about 115,000 users, the company said in its court application.
The money is indeed lost forever if reports that Cotten is actually the only one with access to those cold wallets were true, said Halifax-based Keegan Francis, a blockchain expert and co-founder of Atlantic Blockchain, an education, consultation and contracting firm. Keeping cryptocurrencies in exchanges such as Quadriga is a high risk proposition because there is hardly any protection for the money as is the case with established banks.
“If I were running a multimillion dollar exchange I would leave the private key to any and all accounts in a paper backup. I’d write down a secret that would give me access to my private keys and I would give that to lawyers in a sealed envelope and I would put it in a will,” he said.
“It really would have made sense for him to give that password to someone else, but I’m not convinced that he didn’t.”
(Source:www.thechronicleherald.ca)
It has been reported that the sole access keys to millions of dollars belonging to the company’s clients has been cut off with the sudden death of the founder, chief executive and sole director of Quadriga - Gerald Cotten at the age of 30.
“A visionary leader who transformed the lives of those around him, Gerry died due to complications with Crohn’s disease on December 9, 2018, while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need,” the company said in a post on its website and Facebook.
Users of the company were allowed to deposit cash or cryptocurrency,. The company was established in December 2013. Users could then sell cryptocurrency or traditional currency and then deposit it to their bank accounts. This form of service is useful for those bitcoin and other cryptocurrency owners who are most often not able to use them for purchasing goods or services.
Following this debacle, the company has completely shut down the exchange.
Following the death of Cotten, cryptocurrency worth about $190 million were unable to be located by Quadriga employees according to court filings as reported in the media. Cryptocurrency within Quadriga’s “cold” wallets were attempted to be accessed by employees. A “cold” wallet is a system which enables offline storage of cryptocurrencies offline to prevent hacking such as using USB sticks or electronic hardware which are never connected to the internet.
“Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units,” it said in court filings.
The laptop used by Cotten is encrypted and that she was not involved in the business, said Cotten’s ’s widow Jennifer Robertson.
“I do not know the password or recovery key,” she said in an affidavit according to the media. “Despite repeated and diligent searches, I have not been able to find them written down anywhere.”
An application for creditor protection on Jan. 31 was filed by the Vancouver-based exchange. The company also said that $70 million in currency is owed by the company. It also owes an additional amount of cryptocurrency worth at about $180 million, calculated on the basis of market prices of the currencies in December. Those cryptocurrencies belonged to about 115,000 users, the company said in its court application.
The money is indeed lost forever if reports that Cotten is actually the only one with access to those cold wallets were true, said Halifax-based Keegan Francis, a blockchain expert and co-founder of Atlantic Blockchain, an education, consultation and contracting firm. Keeping cryptocurrencies in exchanges such as Quadriga is a high risk proposition because there is hardly any protection for the money as is the case with established banks.
“If I were running a multimillion dollar exchange I would leave the private key to any and all accounts in a paper backup. I’d write down a secret that would give me access to my private keys and I would give that to lawyers in a sealed envelope and I would put it in a will,” he said.
“It really would have made sense for him to give that password to someone else, but I’m not convinced that he didn’t.”
(Source:www.thechronicleherald.ca)