Exchange News

A leading Canadian exchange locked out of its crypto cold storage holding $145M

A leading Canadian exchange, QuadrigaCX, may not be able to recover approximately 145 million U.S dollars worth of cryptocurrency held in its crypto cold storage.

This is after the demise of its founder Gerry Cotton who was the sole controller of the exchange’s crypto cold storage.

According to an affidavit filed by Cotton’s widow, Jennifer Robertson:

Gerry was always very conscious about security… [He] had a work email address, an encrypted email address, a personal email address and he also used an encrypted messaging system to conduct business.

Earlier, the exchange had indicated that it was working hard to resolve liquidity issues:

Which include attempting to locate 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 bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.

The exchange then filed for creditor protection in the Nova Scotia Supreme Court plus a stay of proceedings to prevent investors from filing a class action lawsuit.

To try and gain access to the crypto cold storage, Robertson even hired a computer specialist to try and hack into Gerry’s laptop. But Gerry being a security conscious person, the hacker has not had much success.

Roberson also noted that if the crypto cold storage is completely inaccessible, the exchange will be put on sale and the proceeds used to pay users.

Globe and Mail, a Canadian news outlet, while quoting other exchange operators in the country, noted that Gerry’s move to single-handedly control the exchange’s crypto cold storage was a life hazard since he was offering himself to kidnappers.

Although death is unplanned, a proper continuity plan would have saved the exchange from liquidity problems even in the absence of its founder.

Do you think crypto exchanges should adopt a multi-signature system to grant access to crypto reserves?

Let us know your thoughts in the comments section below.

coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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