A crypto exchange Quadriga CX got $200 million serious problem with no obvious solution – just the latest cautionary tale in the unregulated world of cryptocurrencies. This startup is not able to retrieve C$190 million ( almost $145 million ) in form of, Bitcoin, Litecoin, Etherium and other coins held for its customers. According to court documents filed on 31 January in Halifax, Nova Scotia. Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed.
Access to Wallets (this is an application which stores the keys which are used to send and receive crypto) on Quadriga CX is seemed to be lost by the passing of the Company’s CEO Gerald Cotten who was just 30 years old. He died from Crohn’s disease in India on Dec 9, 2018.
Gerald Cotten was always conscious about the security, the laptop, email addresses and other things he used to run his 5 years old setup were all encrypted. Moreover, according to an affidavit by Jennifer Robertson who is his widow now.
Cotten took the sole responsibility of all the coins and funds of his business, and to avoid being hacked, he moved most of the digital currencies into cold storage. The problem now is that his widow said that she isn’t able to find out the passwords and other business records for the company.
Moreover, she said in the court filing that computer experts were brought to try to hack into Cotten’s mobile and computer and met with limited success and attempted to decrypt the encrypted USB key but failed.
Robertson said, Company’s inventory of crypto coins is now unavailable after Gerry Cotten’s death and some of it is lost. Moreover, she added that Quadriga’s access to cryptocurrency has been severely compromised and the company has been unable to negotiate the bank drafts provided by distinct payment processors.
The company’s directors posted a notice on the website on 31 Jan that it was asking the Nova Scotia court for creditor protection while they address “significant financial issues” are affecting their ability to serve their customers. A hearing is scheduled for Tuesday, and Ernst and Young have been chosen as a proposed monitor.
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,’ the firm said. “Unfortunately, these efforts have not been successful.”
As it is an often case with crypto as it already suffered 5 big attacks including Coincheck Inc last year where hackers stole nearly $500 million of cryptocurrencies. Moreover, online speculation also suggests that even if Quadriga CX claims that it cannot access the funds but the funds have been moving somewhere.
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