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Cryptocurrency Exchange QuadrigaCX Loses Access to Cold Storage Funds

· 02 Feb 2019 in Crypto News
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

Bitcoin exchange platform QuadrigaCX applied for creditor protection after losing access to most of the funds handled. The information was released a few hours ago by CoinDesk after having access to a court filing. The exchange owes customers around $250 million CAD (close to $190). The exchange provided similar information on its website as well.

Quadriga Exchange Owes $190 Million to Customers

According to a court filing, the crypto exchange Quadriga owes several millions of dollars to investors. The exchange had 115,000 users with balances on the exchange. The platform had around 26,500 Bitcoin (BTC), 11,000 Bitcoin Cash (BCH), 11,000 Bitcoin SV (BSV), 35,000 Bitcoin Gold (BTG), 200,000 Litecoin (LTC) and 430,000 Ether (ETH).

Nevertheless, it is not clear which part of the crypto holdings was kept in cold storage wallets. There were just a few coins in the hot storage wallet the exchange handled. There is no information regarding the number of assets that this hot wallet had.

On the matter, Jennifer Robertson, the widow of QuadrigaCX founder Gerald Cotten, commented:

“The normal procedure was that [QuadrigaCX founder and CEO Gerald Coten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”

She went on explaining that Cotten was the person responsible for the funds and coins. No other team member had access to them. There is a small possibility that some of these funds are stored on other platforms, including exchanges. Nevertheless, there was no information on the matter.

Cotten has recently died of Corhn’s disease in Jaipur India. This was informed by the exchange back in January 2019. It might be possible for Cotten to be storing all the coins in a cold wallet solution. However, all of this might be completely lost.

She mentioned that she does not have any information about Cotten regarding these funds. The computer he had is encrypted and she does not have access to the password or recovery key.

In general, cryptocurrency exchanges tend to be targeted by hackers. One of the exchanges that lost its funds a few days ago was Cryptopia. One of the main problems exchanges have is that they do not store their funds in cold storage wallets. Nonetheless, this time seems to be completely different.

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