Canada’s QuadrigaCX Loses $145 Mil in Cold Crypto Storage After CEO’s Demise

Feb 2, 2019 at 16:00 Update Date :Feb 2, 2019 at 16:00 UTC

Canadian crypto and the country’s largest bitcoin exchange, QuadrigaCX, has reportedly lost funds worth CA$190 million dollars ($145Million) from its cold storage, according to a report published on Feb.1.

The missing funds include tokens such as Bitcoin, Bitcoin Cash, Bitcoin Cash SV, Bitcoin Gold, Litecoin, and Ethereum worth CA$190 million, according to an affidavit filed on Jan.31.

A Canadian news outlet has stated that since the demise of founder and CEO of QuadrigaCX, Gerald Cotten, the exchange has been unable to recover the funds and have no clue as to how and where to locate them.

The widow of Gerald Cotton, Jennifer Robertson, has said that her late husband was the only person to have access to the digital assets in the exchange’s cold storage.

In general, most major exchanges prefer to store a majority of their funds in cold storages as these are “considered” safe from hacking and breaching schemes since they are not connected to the internet and are, therefore, off the grid.

However, each firm has in place a fail-safe authentication system that allows the withdrawal of funds in the most unfortunate or unlikely circumstances but QuadrigaCX had no such feature.

The affidavit file states:

“The normal procedure was that [QuadrigaCX founder and CEO Gerald Cotten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”

Cotten supposedly used his personal computer to gain access to the cold storage, which no doubt was encrypted.

Robertson, in her statement in the affidavit, said:

“I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.”

Robertson went so far as to hire a consultant to hack into her husband’s computer but to no avail.

The exchange’s current inventory stands at just CA$375,000 ($286,000) in cash, while the firms owes its clients an outstanding CA$260 million ($198,435,000).

Cotton’s wife has reportedly been receiving threats from frustrated users, states her affidavit. Notably, executives of other exchanges have claimed, that one person being in charge of the entire exchange was unusual as it would make him a vulnerable target.

Also Read: Non-Custodial Crypto Services Exemption Bill Resubmitted In The U.S. Congress

Leave a Reply

Please Login to comment
Notify of