Difference between revisions of "QuadrigaCX"

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(Death of CEO Causes Security Issues)
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== Death of CEO Causes Security Issues ==
 
== Death of CEO Causes Security Issues ==
  
In December 2018, Gerald Cotten, the founder and CEO of QuadrigaCX, died suddenly while traveling to India. He was 30 years old. Cotten was the sole possessor of the passcodes necessary for accessing the [[digital assets]] owned by the exchange's customers. He kept the codes on an encrypted laptop to which his widow, Jennifer Robertson, did not have access. Because of this, QuadrigaCX's customers could not access the approximately 26,000 [[bitcoin]], 11,000 [[Bitcoin Cash]], 11,000 [[Bitcoin SV]], 200,000 [[Litecoin]], and 400,000 [[Ether]] held in cold [[wallet]] storage. A ruling from the Supreme Court of Nova Scotia said the exchange owed its 115,000 customers roughly $250 million CAD ($190 million USD) in crypto and fiat currency.<ref>{{cite web|url=http://fortune.com/2019/02/04/cryptocurrency-quadrigacx-gerald-cotten-frozen-funds/?xid=soc_socialflow_twitter_FORTUNE&utm_medium=social&utm_campaign=fortunemagazine&utm_source=twitter.com|name=Cryptocurrency Owners Can't Access Funds After Exchange CEO Dies—Because No One Knows the Password|org=Fortune|date=February 6, 2019}}</ref><ref>{{cite web|url=https://www.coindesk.com/quadriga-creditor-protection-filing|name=QuadrigaCX Owes Customers $190 Million, Court Filing Shows|org=Coindesk|date=February 6, 2019}}</ref>
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In December 2018, Gerald Cotten, the founder and CEO of QuadrigaCX, died suddenly while traveling to India. He was 30 years old.  
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Cotten was the sole possessor of the passcodes necessary for accessing the [[digital assets]] owned by the exchange's customers. He kept the codes on an encrypted laptop to which his widow, Jennifer Robertson, did not have access. Because of this, QuadrigaCX's customers could not access the approximately 26,000 [[bitcoin]], 11,000 [[Bitcoin Cash]], 11,000 [[Bitcoin SV]], 200,000 [[Litecoin]], and 400,000 [[Ether]] held in cold [[wallet]] storage. A ruling from the Supreme Court of Nova Scotia said the exchange owed its 115,000 customers roughly $250 million CAD ($190 million USD) in crypto and fiat currency.<ref>{{cite web|url=http://fortune.com/2019/02/04/cryptocurrency-quadrigacx-gerald-cotten-frozen-funds/?xid=soc_socialflow_twitter_FORTUNE&utm_medium=social&utm_campaign=fortunemagazine&utm_source=twitter.com|name=Cryptocurrency Owners Can't Access Funds After Exchange CEO Dies—Because No One Knows the Password|org=Fortune|date=February 6, 2019}}</ref><ref>{{cite web|url=https://www.coindesk.com/quadriga-creditor-protection-filing|name=QuadrigaCX Owes Customers $190 Million, Court Filing Shows|org=Coindesk|date=February 6, 2019}}</ref>
  
 
Robertson, the sole executor of Cotten's will, took out collateral mortgages on four luxury properties in Nova Scotia owned by Robertson and Cotten, worth a combined total of $1.1 million. She removed Cotten's name from the ownership documents of all four properties, creating a trust in which she is a trustee. As of February 5, 2019, she also transferred ownership of two of the properties to the trust. These actions were described as "atypical" by people familiar with the matter. Some speculated that this may have been done to protect the properties from being seized by Cotten's creditors. Paul Trudelle, a partner at the Hull & Hull law firm in Toronto said that this may have been done to protect the properties from being seized due to "some fraudulent reason to set side the right of survivorship."<ref>{{cite web|url=https://www.thechronicleherald.ca/news/local/quadriga-founders-widow-has-four-ns-properties-moved-further-from-creditors-reach-281971/|name=Quadriga founder's widow moved 4 Nova Scotia properties further from creditors' reach|org=The Chronicle Herald|date=February 8, 2019}}</ref>
 
Robertson, the sole executor of Cotten's will, took out collateral mortgages on four luxury properties in Nova Scotia owned by Robertson and Cotten, worth a combined total of $1.1 million. She removed Cotten's name from the ownership documents of all four properties, creating a trust in which she is a trustee. As of February 5, 2019, she also transferred ownership of two of the properties to the trust. These actions were described as "atypical" by people familiar with the matter. Some speculated that this may have been done to protect the properties from being seized by Cotten's creditors. Paul Trudelle, a partner at the Hull & Hull law firm in Toronto said that this may have been done to protect the properties from being seized due to "some fraudulent reason to set side the right of survivorship."<ref>{{cite web|url=https://www.thechronicleherald.ca/news/local/quadriga-founders-widow-has-four-ns-properties-moved-further-from-creditors-reach-281971/|name=Quadriga founder's widow moved 4 Nova Scotia properties further from creditors' reach|org=The Chronicle Herald|date=February 8, 2019}}</ref>

Revision as of 12:42, 8 February 2019

QuadrigaCX
Quadrigacx.jpg
Founded 2013
Headquarters Nova Scotia, Canada
Key People Gerald Cotten, Founder, former CEO (deceased)
Employees 2-10
Products Cryptocurrency trading platform
Twitter @QuadrigaCoinEx
LinkedIn Profile
Website QuadrigaCX Homepage

QuadrigaCX is a cryptocurrency trading platform based in Nova Scotia, Canada. The exchange's website went offline on February 5, 2019.[1]

Death of CEO Causes Security Issues

In December 2018, Gerald Cotten, the founder and CEO of QuadrigaCX, died suddenly while traveling to India. He was 30 years old.

Cotten was the sole possessor of the passcodes necessary for accessing the digital assets owned by the exchange's customers. He kept the codes on an encrypted laptop to which his widow, Jennifer Robertson, did not have access. Because of this, QuadrigaCX's customers could not access the approximately 26,000 bitcoin, 11,000 Bitcoin Cash, 11,000 Bitcoin SV, 200,000 Litecoin, and 400,000 Ether held in cold wallet storage. A ruling from the Supreme Court of Nova Scotia said the exchange owed its 115,000 customers roughly $250 million CAD ($190 million USD) in crypto and fiat currency.[2][3]

Robertson, the sole executor of Cotten's will, took out collateral mortgages on four luxury properties in Nova Scotia owned by Robertson and Cotten, worth a combined total of $1.1 million. She removed Cotten's name from the ownership documents of all four properties, creating a trust in which she is a trustee. As of February 5, 2019, she also transferred ownership of two of the properties to the trust. These actions were described as "atypical" by people familiar with the matter. Some speculated that this may have been done to protect the properties from being seized by Cotten's creditors. Paul Trudelle, a partner at the Hull & Hull law firm in Toronto said that this may have been done to protect the properties from being seized due to "some fraudulent reason to set side the right of survivorship."[4]

Jesse Powell, CEO of the cryptocurrency exchange Kraken, said that the California-based exchange had some of the balances from QuadrigaCX...though of the 230,000 Ether coins QuadrigaCX supposedly had, only about 1,000 remained in its wallets. Christine Duhaime, a Canadian lawyer specializing in AML laws, said that the lack of transparency regarding the missing coins was "unusual," as blockchain technology is supposed to allow for the auditing of companies and crypto transactions in situations like these. Emin Gün Sirer, a professor at Cornell University and co-director of the Initiative for CryptoCurrencies and Contracts, concurred with Duhaime. He told Bloomberg that the situation "doesn't make sense," because "the one amazing thing about blockchains is that anyone can audit, in essence, any company."[5]

On February 7, the British Columbia Securities Commission (BCSC) said that it could not assist QuadrigaCX's customers. Brian Kladko, who spoke on behalf of the company, said that this was because the BCSC "does not currently have any indication that QuadrigaCX...was trading in securities or derivatives or operated as a marketplace or exchange under British Columbia securities laws...as such, the BCSC does not regulate it."[6]

References