The Continued Learning Curve: Millions Are Still Missing from QuadrigaCX

godcoin (58)in #crypto-news • 6 years ago (edited)

Nearly a month ago, GODcoin covered the story and controversy shrouding the Canadian cryptocurrency exchange company, QuadrigaCX. Within this time period, a few new developments have appeared in the news, but it only brings more questions and mystery to the table. Not only that, but this gives everyone a new learning curve in the industry. As a quick summary, the CEO, Gerald Cotten, passed away suddenly while in India. The Independent summarized:

His death on 9 December in India meant the Vancouver-based exchange was unable to pay 115,000 customers C$260 million (£148m) in bitcoin and other cryptocurrencies, according to court documents, as Mr Cotten had sole access to the digital wallets.

Of the six wallets believed to be used Mr Cotten to store large sums of digital assets offline, five were found to be empty.

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Unfortunately, his wife still has not found a password and claims to not know anyone else who knew the password to these wallets. From today's article that was published by the Independent here is what the firm assigned to this case recently stated:

A report published by Ernst & Young on 1 March stated that the sixth wallet 'appears to have been used to receive bitcoin from another cryptocurrency exchange account', though the figure was only a tiny fraction of the missing millions.

No other developments were reported in this article. Some wise words were spoken by the CEO of BeQuant last month that many in the industry should be aware of if they were overlooked. The article reported:

This is common practice for major cryptocurrency exchanges, though industry experts say it is unusual for the passwords needed to access the cod storage wallets to be kept by just one person.

'Using a reputable custodian to hold the private keys outside the company is perhaps the best option to ensure these codes are not lost,' Erik Wilgenhof Plante, CCO of the cryptocurrency exchange BeQuant, told The Independent in February. 'A single person owning this information creates a huge vulnerability.'

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The article also closes with something else important to remember. Security is vital, especially for the customer!

'There are still a number of suspicious circumstances around Gerald Cotton's reported death that need to be looked into,' Steve Bunnell, a former US Department of Homeland Security General Counsel who now serves as a data security specialist at the LA-based law firm O'Melveny, told The Independent.

'But regardless of whether the custody of crypto on QuadrigaCX was mismanaged or whether there was something more nefarious involved, the situation highlights the importance for customers of dealing with crypto exchanges that are reputable and know how to safely custody cryptocurrency.'

This is a learning curve for all crypto companies. Having a sole proprietor of primary key passwords is like playing with fire. Not only would it be putting the company at risk including the employees, but it is irresponsible and affects many of the customers that keep the business going, especially in the wake of an accident. Someone is bound to get burned with a simple mistake this large. As stated in the previous GODcoin article, 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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