QuadrigaCX Founder Dies and Customers Lose Access to Their Crypto Investments

Discussion in 'HardForum Tech News' started by cageymaru, Feb 4, 2019.

  1. cageymaru

    cageymaru [H]ard as it Gets

    Messages:
    19,725
    Joined:
    Apr 10, 2003
    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.
     
  2. Brian_B

    Brian_B 2[H]4U

    Messages:
    2,737
    Joined:
    Mar 23, 2012
    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.
     
  3. RogueTadhg

    RogueTadhg [H]ard|Gawd

    Messages:
    1,527
    Joined:
    Dec 14, 2011
    Damn. This sucks in so many ways.
     
  4. motqalden

    motqalden [H]ard|DCOTM Feb 2018, June 2019

    Messages:
    1,181
    Joined:
    Jun 22, 2009
    Hmm. I had about $20 in BTC there....
     
    Uvaman2 likes this.
  5. HockeyJon

    HockeyJon [H]ard|Gawd

    Messages:
    1,067
    Joined:
    Dec 14, 2014
    “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!
     
    mashie likes this.
  6. Burticus

    Burticus 2[H]4U

    Messages:
    3,872
    Joined:
    Nov 7, 2005
    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.
     
    Last edited: Feb 4, 2019
    The Mad Atheist likes this.
  7. MV75

    MV75 [H]ard|Gawd

    Messages:
    1,025
    Joined:
    Nov 13, 2007
    I understand it's an os user lock?


    If only there were people she could take the laptop to that can unlock it.....
     
    HAL_404 likes this.
  8. jojo69

    jojo69 [H]ardForum Junkie

    Messages:
    10,371
    Joined:
    Sep 13, 2009
  9. HAL_404

    HAL_404 Limp Gawd

    Messages:
    275
    Joined:
    Dec 16, 2018
    IMO ... she's lying
     
    viscountalpha and WmOrt like this.
  10. refraxion

    refraxion [H]ardForum Junkie

    Messages:
    8,420
    Joined:
    Oct 3, 2007
    Pretty sure it’s a cold storage lock, they probably don’t have the pw to that wallet.
     
    mord likes this.
  11. Fresch

    Fresch n00b

    Messages:
    41
    Joined:
    Mar 14, 2018
    Alt/control/delta works on everything!
     
  12. Archaea

    Archaea [H]ardForum Junkie

    Messages:
    9,181
    Joined:
    Oct 19, 2004
    Sounds like an exit scam...
     
  13. Ocellaris

    Ocellaris Ginger @le, an alcoholic's best friend.

    Messages:
    18,795
    Joined:
    Jan 1, 2008
    This dude isn’t dead, lol:

     
  14. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    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.
     
  15. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    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.
     
  16. exlink

    exlink [H]ardness Supreme

    Messages:
    4,246
    Joined:
    Dec 16, 2006
    Interesting, but the over use of chromatic aberration in that video made my eyes want to bleed.
     
  17. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    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.
     
  18. wootius

    wootius [H]Lite

    Messages:
    105
    Joined:
    Mar 6, 2017
    Not dead, hiding in a extradition free nation somewhere and enjoying the money of crypto-suckers. Warms my heart.

     
  19. thebufenator

    thebufenator [H]ard|Gawd

    Messages:
    1,125
    Joined:
    Dec 8, 2004
  20. oldmanbal

    oldmanbal [H]ard|Gawd

    Messages:
    2,039
    Joined:
    Aug 27, 2010
  21. djoye

    djoye 2[H]4U

    Messages:
    2,766
    Joined:
    Aug 31, 2004
    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.
     
    Rob94hawk likes this.
  22. blackacidevil

    blackacidevil Gawd

    Messages:
    661
    Joined:
    Oct 1, 2004
    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?
     
    Lakados and wootius like this.
  23. Dead Parrot

    Dead Parrot 2[H]4U

    Messages:
    2,427
    Joined:
    Mar 4, 2013
    If only he had written the password on a sticky note and stuck it on the laptop like everyone else does....
     
    Sulphademus, gunbust3r and Lakados like this.
  24. Chimpee

    Chimpee [H]ard|Gawd

    Messages:
    1,389
    Joined:
    Jul 6, 2015
    Damn that is hella shady.
     
  25. wizzi01

    wizzi01 [H]ard|Gawd

    Messages:
    2,021
    Joined:
    Apr 25, 2008
    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.
     
    DocNo, The Mad Atheist and WmOrt like this.
  26. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    Under the keyboard....
     
  27. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    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.
     
  28. BSmith

    BSmith [H]ard|Gawd

    Messages:
    1,324
    Joined:
    Nov 9, 2017
    Hehe,....good.
     
  29. Nenu

    Nenu [H]ardened

    Messages:
    18,735
    Joined:
    Apr 28, 2007
    Whats to say the money isnt in there, it has already been safely tucked away, and the lack of password is a ruse.
     
    Revdarian and The Mad Atheist like this.
  30. motomonkey

    motomonkey [H]ard|Gawd

    Messages:
    1,419
    Joined:
    Jan 17, 2009
    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?
     
    Wrecked Em likes this.
  31. TheOne&OnlyZeke

    TheOne&OnlyZeke 100% Irish

    Messages:
    10,221
    Joined:
    Jul 21, 2000
    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
     
    Revdarian and The Mad Atheist like this.
  32. Darth Ender

    Darth Ender Limp Gawd

    Messages:
    130
    Joined:
    Oct 11, 2018
    A fool and his/her money are soon parted.

    No sympathy.
     
    The Mad Atheist likes this.
  33. zkostik

    zkostik Gawd

    Messages:
    931
    Joined:
    Sep 17, 2009
    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.
     
    Brian_B likes this.
  34. Wrecked Em

    Wrecked Em [H]ardness Supreme

    Messages:
    5,818
    Joined:
    Sep 14, 2004

    The security team put in so much effort, they all had to retire afterwards.
     
  35. shad0w4life

    shad0w4life Gawd

    Messages:
    690
    Joined:
    Jun 30, 2008
    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.
     
  36. Lakados

    Lakados [H]ard|Gawd

    Messages:
    1,490
    Joined:
    Feb 3, 2014
    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.
     
  37. The Mad Atheist

    The Mad Atheist Gawd

    Messages:
    915
    Joined:
    Mar 9, 2018
    Sooooo, how young is the wife, and is there a time limit they can't prosecute after?

    *honey, what's the password, just in case you are hospitalize and the sheep need their coins?
    *thanks, now let me help you sleep with this pillow over your face.....
     
    defaultluser and Sulphademus like this.
  38. Oldmodder

    Oldmodder Gawd

    Messages:
    680
    Joined:
    Aug 24, 2018
    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.
     
    The Mad Atheist likes this.
  39. oldmanbal

    oldmanbal [H]ard|Gawd

    Messages:
    2,039
    Joined:
    Aug 27, 2010
    If you think insurance is going to pay out 1 cent for the fraudulent business operations of this man you are quite mistaken.
     
    motomonkey likes this.
  40. SvenBent

    SvenBent 2[H]4U

    Messages:
    2,894
    Joined:
    Sep 13, 2008


    Did they tried it yet ?
     
    The Mad Atheist likes this.