In recent news, the users of the Canadian crypto exchange QuadrigaCX, lost complete access to their funds due to the founder, Gerald Cotten, passing away in December. This unfortunate and unexpected turn of events happened because he was the sole keeper of the password that held access to the "cold storage facility, where the roughly 26,000 Bitcoin, 11,000 bitcoin cash, 200,000 Litecoin, over 400,000 Ether and other cryptos are not kept on a public computer." This article reported:
QuadrigaCX's website recently went down and the company filed for creditor protection, saying that it was trying to address some 'liquidity issues.' In court filings, Cotten’s wife says that the company owes its users $250 million CAD ($190 million USD), and that to protect its users funds from hackers, a portion of its users coins were kept in a 'cold wallet' — a physical device that isn't connected to the internet. Cotten was the only person with access to the device, according his wife, and she doesn't have the password to decrypt it. The company also had several banking and payment processor issues, with some other organizations holding QuadrigaCX's funds.
Even though this was done to ensure their security from hackers, it has been weeks and the company has not been able to have much success. This recent article from today stated:
'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 company said via a statement on its website. 'Unfortunately, these efforts have not been successful.'
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Reports said that CEO, Gerald Cotten, passed due to complications of Crohn's disease at the age of 30.
The Guardian, today, reported some more insight into what is happening within this developing situation.
The platform continued to accept funds after Cotten's death but was paused by directors on 26 January.
On 31 January, QuadrigaCX filed an application for creditor protection with the supreme court of Nova Scotia, after months of transaction delays.
At a court hearing on 5 February the company is seeking to appoint Ernst & Young as an independent monitor.
Of course, there is some speculation going around at this time, and a multi-signature system could have prevented this scenario from happening in the first place. This could happen to any company or cryptocurrency that does not have a backup protocol or other proactive solutions in place. Clearly, this is a lesson for all, and GODcoin will not be one of those companies to make this type of mistake. Rest assured, you are in good hands with GODcoin!
This article was authored by Judith Monte, @belovebelight
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Good to be on the right team financially!
Good to know!
It is a strange one, and I'm sure there is a lot of speculation surrounding the company... perhaps it could have been avoided with the right protocols in place. But, I will stick with GODcoin, thank you! :)
We wouldn't want the same thing happening again
Godcoin, always striving to be the best. Thanks for sharing.