QuadrigaCX Founder Dies and Customers Lose Access to Their Crypto Investments

cageymaru

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The founder of Canadian cryptocurrency exchange QuadrigaCX, Gerald Cotten, died in early December 2018 and nearly all funds from the exchange are locked away in a password protected cold storage. His widow, Jennifer Robertson says she has no password or recovery key access to the laptop that he used for cold storage. She acknowledges that Mr. Cotten held "sole responsibility for handling the funds and coins." She also said, "Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost." The crypto exchange allegedly kept accepting deposits from users after learning of Gerald Cotten's death and the loss of access to the cold wallet. $190 million in coins belonging to 115,000 investors are affected by the loss of access to the cold storage. Jennifer Roberson's affidavit can be viewed here.

Quadriga keeps only a minimal amount of coins on the server (in a hot wallet). The normal procedure was that Gerry would move the majority of the coins to cold storage as a way to protect the coins from hacking or virtual theft. The amount of coin kept on the server versus in cold storage was originally set at a fixed amount. Transfers could happen automatically or manually. The threshold requirement for Quadriga's hot wallet was removed some time ago and, after that, Gerry manually controlled the flow of coins between the hot and cold wallets credited on the Quadriga platform.
 

HockeyJon

[H]ard|Gawd
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“That just means it’s like, super safe from the government, man!”

- probably what some crypto investor will say

Great to see the benefits of a completely decentralized, unregulated currency platform in action!
 

Burticus

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But anyone could die at any time... car accident, stroke, pissed off lover's ex-husband, etc. To keep other people's coins offline that only he could access... that's a dick move right there.

If his widow can't find a password WTF are people supposed to do? I'll tell ya... they will sue her into oblivion.... for something she had no guilty part in other than being married to the guy.

If I was this lady I would get a lawyer STAT!

edit - so the article says they already filed for creditor protection, not sure if that will protect the widow personally. I would recommend surrendering the laptop to authorities, and moving far far away and changing her name.
 
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MV75

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I understand it's an os user lock?


If only there were people she could take the laptop to that can unlock it.....
 

refraxion

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I understand it's an os user lock?


If only there were people she could take the laptop to that can unlock it.....
Pretty sure it’s a cold storage lock, they probably don’t have the pw to that wallet.
 
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Lakados

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But anyone could die at any time... car accident, stroke, pissed off lover's ex-husband, etc. To keep other people's coins offline that only he could access... that's a dick move right there.

If his widow can't find a password WTF are people supposed to do? I'll tell ya... they will sue her into oblivion.... for something she had no guilty part in other than being married to the guy.

If I was this lady I would get a lawyer STAT!

edit - so the article says they already filed for creditor protection, not sure if that will protect the widow personally. I would recommend surrendering the laptop to authorities, and moving far far away and changing her name.
Laptop was already surrendered, it was submitted to a security team where they have tried to crack the password for more than a month with no success.
 

Lakados

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I understand it's an os user lock?


If only there were people she could take the laptop to that can unlock it.....
According to the police, and the creditors they did, and they were not able to unlock it after a month of trying, hence coming out with it now even though he died back in December and have been dealing with it since then.
 

Lakados

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Sounds like an exit scam...
I would agree but I think it just serves to show a glaring failure of the Bitcoin model and their general security practices, I would like to know how many other exchanges could face a similar problem with the loss of 1 or 2 key employees.
 

djoye

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I'm so tired of hearing about crypt-loss that I don't even care. If people accept the risk, then fine, otherwise, you should've bought a Porsche.
 

wizzi01

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So dude was smart enough to set this up, but not smart enough to cover what happens when he dies? I bet the wife knows and will try to get that money after she flees the country.
 

Lakados

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India has had an extradition treaty with Canada since 1987, so if he's smart, it wont be there.

side-note: If he died Dec 9th, wheres the body?
Supposedly they already had the funeral, the police, lawyers, and creditors were all satisfied with the death certificate. As per Canadian privacy laws they don’t have to tell us where or when the service was held. A lot of big banks are all taking a bath on this one and have probably already written off the losses. One hell of a tax deductible right up in there.
 

Nenu

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So dude was smart enough to set this up, but not smart enough to cover what happens when he dies? I bet the wife knows and will try to get that money after she flees the country.
Whats to say the money isnt in there, it has already been safely tucked away, and the lack of password is a ruse.
 

motomonkey

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Supposedly they already had the funeral, the police, lawyers, and creditors were all satisfied with the death certificate. As per Canadian privacy laws they don’t have to tell us where or when the service was held. A lot of big banks are all taking a bath on this one and have probably already written off the losses. One hell of a tax deductible right up in there.
I must be missing something here, how is anyone but the investors taking a bath? why would a bank take a loss on a private investment of crypto, unless the banks are being irresponsible with depositors money and speculating in crypto with their deposits?
 

TheOne&OnlyZeke

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Dodgy as fuck. Single point of failure?
I don't think so. This was done totally on purpose for sure.
Maybe he was secretly dying anyway and wanted to leave a giant nest egg for his wife.
Once all this shit blows over, she'll access the funds and live the life
 

zkostik

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Safer than a bank - I'll give the crypto guys that one.

Good luck to anyone who happens to be caught up in this. Hopefully it plays out well in the end.
Sure is where everything just gets lost overnight. Maybe it was an issue in Wild West, but now you're certainly better off using a real bank unless you're really doing something shady or don't want to pay your dues. Invest in play money and get screwed, not feeling sad for these folks at all. This happens left and right with crypto but there's still no shortage of people who want to get burned.
 
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yeah I've got several ethereum and some BTG etc on there, I think I took all my money out but still I paid Capital gains on all of that so how does our government plan on handling that now.
 

Lakados

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I must be missing something here, how is anyone but the investors taking a bath? why would a bank take a loss on a private investment of crypto, unless the banks are being irresponsible with depositors money and speculating in crypto with their deposits?
Death by accidentally causes means insurance gets involved. Losses will likely be covered there, at least to some degree. Unless they were operating a 100 million dollar business with no insurance in which they were idiots.
 

Oldmodder

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The idea was nice, but with the level it have seen adoption by criminals, and targeted by criminals, well that just put me off.
Never owned a BC never will.
 

oldmanbal

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Death by accidentally causes means insurance gets involved. Losses will likely be covered there, at least to some degree. Unless they were operating a 100 million dollar business with no insurance in which they were idiots.
If you think insurance is going to pay out 1 cent for the fraudulent business operations of this man you are quite mistaken.
 
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