Crypto Exchange May Have lost $145 million after its CEO’s Sudden Death

Multiple reports have surfaced suggesting the demise of a crypto exchange CEO may have led to the loss of over $145 million in bitcoin and other assets.

Quadriga, one of Canada’s biggest cryptocurrency exchange launched in December 2013 has in response to the death of its 30-year old CEO Gerald Cotten, announced that it is unable to gain access to about $145 million in cryptocurrencies given the CEO’s sole custody of the private keys to the exchange’s wallet.

The exchange is said to have its major digital custody currencies stored in offline wallets also known as ‘cold wallets’. The choice of cold wallets stems from its high security compatibility especially against hackers; however in the current scenario and according to company sources, only the deceased Cotten has access to the wallets.

At this time, Cotten’s death has launched a FUD movement across the crypto space especially highlighting the risk always pointed out by investors considering the custody and safe keeping of their assets. Quadriga faces a possible huge crisis scenario if these claims turn out negatively with about 92,000 of its 363,000 registered customers and users to be refunded.

Following weeks of protracted attempts and silence over the CEO’s death in December 2018, the Canadian exchange in a press release said:

For the past weeks, we have worked extensively to address our liquidity issues which include attempts to locate and secure our very significant cryptocurrency reserves held in cold wallets. Unfortunately, these efforts have not been successful.

The company is also reported to have hired tech experts in a bid to hack Cottens’s laptop and other devices to recover the missing cryptocurrencies.

Cotten’s widow, Jennifer Robertson has also come out to say that all efforts at recovering his password and currency keys have all proved futile especially as the CEO’s laptop is encrypted.

However, as at yesterday 06 February 2019, the Supreme Court of Nova Scotia granted Quadriga exchange a ‘temporary creditor protection’. The move prevents litigation proceedings against the company for 30 days while it attempts to recover missing funds.

NEW REVELATIONS

Sequel to yesterday’s proceedings, a few revelations struck; first the exchange had no physical office building or bank account. Its only proof of legal existence was a business registration in British Columbia meaning all administrative operations of the company were solely handled by the CEO.

At the legal hearing was info by the QuadrigaCX lawyers that some cryptocurrencies had been found; with the lawyers pleading with the court to oversee and allow the recovery of these cryptos into a single wallet. The plea was followed by a prayer by creditors lawyers for access to drives and laptop which might contain the funds..

Also revealed by some court documents is proof that Gerald Cotten had filed a will 12 days before his death in which he listed substantial assets to his wife.

A new twist by accusers of the exchange point fingers to possible misinformation, as some creditors say the platform has no single cold storage wallet but instead has the funds scattered in varying exchanges; the accusers claim to have wallet addresses  known to belong to QuadrigaCX. Among these accusers is Kraken CEO, Jesse Powell who claims that his platform had several addresses belonging to the embattled QuadrigaCX just as even Quadriga lawyers say they are finding more money all the time, leading to more questions over the veracity of the company’s claims.

Extensively, there has been little effect of the news across the crypto space; regular education around the space says thus: “NEVER HOLD YOUR COINS ON AN EXCHANGE” while also offering crypto holders the best options to hold their coins in offline wallets with their funds and private keys saved and known to them only.

Comments by certain crypto enthusiasts describe Quadriga’s claims as insanity for having one man hold such access to funds against basic and logical principles. Also highlighted in this case is the liquidity crisis faced by the Canadian exchange over the past year; all these pointing to multiple queer deductions.

What are your thoughts on this? Could this be an attempt at an exit scam by QuadrigaCX?

NOTE: NairaEx does not operate as a custodian of customer funds; all coins are under customers’ full control…We currently do not offer wallet services. BUY&SELL your crypto (Bitcoin) at www.nairaex.com, it’s fast, safe and reliable.

 

 

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CryptoEnthusiast,CryptoEducator and Angel Investor,Writing Pro and Techie