Surely, by now, most Canadians have a rough understanding of the situation being handled by Canadian cryptocurrency exchange, QuadrigaCX. For those unaware of what has transpired to date, here is a brief recap of these events.
Founded by Gerald Cotten, QuadrigaCX is a cryptocurrency exchange based in Canada. The exchange was arguably the most popular of various offerings tailored towards Canadians at the time of its demise.
Whats the deal?
In an unfortunate series of events, founder Gerald Cotten died of complications to Crohn’s disease. At the young age of 30, this death was unexpected by all.
Acting as the CEO of QuadrigaCX, Cotten had taken it upon himself to have sole custody of the platform’s cold wallets. Unfortunately, at the time of his death, there are no other known individuals that are privy to the necessary keys allowing access to the funds stored on these wallets. This means that the funds are potentially lost forever.
What makes this such an issue is the sheer amount of people affected. It is believed that the lost funds total over $150 million worth of crypto, alongside over $70 million worth of FIAT.
Naturally, a situation as serious as this has resulted in a response from the government. While the British Columbia government has stated they will not look into the situation, the Ontario SEC has indicated that they are launching an investigation.
Beyond this, QuadrigaCX has filed for a ‘stay of action’ with the Nova Scotia Supreme Court – with their request granted. In addition, Ernst & Young is being used to oversee/monitor events henceforth.
Beyond these steps, various personal items of Cotton’s have been procured, in an attempt to try and find the keys necessary to release the funds. These items include various laptops, phones, etc.
With the attention on the exchange, an old podcast has resurfaced from 2014. This podcast includes Cotten speaking on the storage practices of the exchange at the time. He states in the conversation that, at least during 2014, QuadrigaCX utilized paper wallets.
While professionals are actively trying to gain access to Cotton’s personal devices, they may now have another avenue to search for an answer.
Despite the situation at hand, employees at the embattle exchange inadvertently transferred BTC to their cold wallets; the very same cold wallets that they do not have access to. This has now resulted in a further significant sum of money being lost.
The amount of funds transferred total over $500,000 worth of BTC.
If the situation at hand isn’t an astounding turn of events already, there are those that believe the story gets even more outlandish.
There are many out there that believe this was not an accident. Rather, they believe that this is an ‘exit scam’, and that Gerald Cotton is alive and well. Furthermore, they believe that he has absconded with the funds of his fellow Canadians, and is living in a remote region of the globe.
Those that believe in this scenario point to multiple issues with the story.
- Crohns’ is typically a manageable disease that can be managed throughout life
- Cotten was only 30 years old
- He wrote his Will a mere 12 days prior to dying
- The death occurred in India, with the certificate coming from a region known for producing fakes
With the amount of attention on the situation, the answer will surely come out eventually. Only then will we know if there is some truth to these outlandish scenarios.
In recent months, we have detailed QuadrigaCX various times. Prior to dealing with the situation at hand, the leading exchange was waging a battle against the big banks.
For more information on that on-going saga, make sure to check out the article below.
A Movie in the Making
The entire story of QuadrigaCX has the making of a movie. From the unlikely origin points, rise to status, and crashing fall. This exchange has, unfortunately, impacted thousands of Canadians in a negative way. We have seen the story evolve from simply a loss of access to funds, to a questionable death, to blatant negligence.
While accessibility and transparency are two of the major draws towards cryptocurrencies, this is a perfect situation that demonstrates the dangers of the technology. While many yearn for emancipation from big banks, this means that we stand to become responsible for our own funds. Those that have chosen to store their funds within a wallet not under their control, now find themselves in a situation in which they can ‘look, but not touch’.