The trending story of QuadrigaCX is no newer in the cryptospace but the recent turn of events keeps changing earlier inferences and further building wrong speculations especially with respect to customers assets locked on the exchange.
For those who are not abreast of the situation, Gerald Cotten, The CEO of Canada’s first centralized cryptocurrency exchange died in December 2018 in India. His death threw the Canadian’s cryptospace into panic as He alone has the password to his encrypted laptop thus making it impossible for Quadriga’s customers to have access to their private keys. Ernst and Young (EY) have since been tasked by the Supreme Court of Nova Scotia with the responsibility of investigating the Quadriga exchange and in the past few weeks, the turn of event is worth bringing out for your information.
Ernst and Young initially discovered that QuadrigaCX does not keep a well-structured accounting system which brings a question of accountability. The official first report from EY released on February 12, 2019. In the report, it was discovered that Quadriga held the following cryptocurrency balances (with approximate Canadian currency equivalent aggregating to $902,743) within its hot wallets as at the time of the publishing:
Bitcoin: 154.12008035 @ $4,550.25 = $701,285, Bitcoin Cash SV: 0.01353067 @ $80.55 = $1, Bitcoin Cash: 33.31348647 @ $153.88 = $5,126, Bitcoin Gold: 2,032.65853677 @ 12.58 = $25,570, Litecoin: 822.26686907 @ $44.95 = $36,961, Ether: 951.49917091 @ $140.62 = $133,800. The report also says that about 103 Bitcoin valued at CAD$468,675 was mistakenly transferred to cold wallets that only Gerald Cotten have access to. EY claims to be investigating whether at all QuadrigaCX has cold wallets operational in its servers.
Speculations already arose about the possibilities of QuadrigaCX being a fraud in the grand scheme of things and one may ask, how feasible is it for an exchange under investigation able to transfer such huge amount of bitcoin to storage that no one can access, knowing the computational requirements needed to run successful transactions on the blockchain. Others are even marketing a school of thought that the company is merely shielding itself from meeting her financial obligation to customers.
Reality For QuadrigaCX Customers
Many customers believed they have lost their life savings on the to the exchange CEO’s death, other users are already losing hope of retrieval and refund of their money but solace can be taken in the fact that major cryptocurrency scandals have always been cracked down and retrievals made. There is thus far a commendable transparency in the legal proceedings filed by The Representative Counsel for the affected persons (both customers with high and low-value assets) and are working hard with EY and in the case of retrieval of assets from the cold wallets, affected persons would be contacted and provided with modalities for claiming their money.
The case of QuadrigaCX is an unfortunate event that should inspire better innovative structures by centralized exchanges such that one man alone does not control the codes for accessing private keys and other cryptographic features that solidifies the exchanges’ security. Had Cotten shared passwords to any of his trusted allies, many people would have been spared this colossal cryptocurrency upset