Cryptocurrency exchange loses $145 million after CEO takes passwords to the grave

mongeese

Posts: 385   +57
Staff member

A common practice among cryptocurrency exchanges is to store customers' coins in cold wallets, which are offline and encrypted and can only be accessed by those who know the password. This protects them from hacking and virtual theft but does mean that the entire value of the wallet rests in the hands of those with the password.

An affidavit filed by QuadrigaCX on January 31 reveals that there are 26,500 bitcoins ($92 million), 11,00 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), 200,000 litecoin ($6.5 million) and 430,000 ether ($46 million) stored on Cotton’s encrypted and inaccessible laptop.

While the company has hired several security researchers (read: hackers) to attempt to access the laptop, they’ve had very little success so far. The company’s stance has gone from “Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost” to “most, if not all” of their customers will suffer damages.

To try and buy time to access the laptop and possibly to liquidate the company, QuadrigaCX has applied for a stay of proceedings from the Supreme Court. Ideally, it could let them access around $50 million or so that is currently trapped in a legal battle with a Canadian bank, though a good portion of that money is their customers', too.

Since it’s leaked out that customers may not get their money back, many have taken to Reddit and Twitter to request proof of death and expressing their anger that the money was so mismanaged. QuadrigaCX employees have admitted that they’re even receiving death threats.

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J spot

Posts: 234   +158
So incompetent, yet confident enough to run and handle people's money.

This reminds me of this aspiring politician many years ago that once said something to the effect of, "If evolution is real, then why aren't monkeys turning into humans?"

Now you can believe or not believe in evolution, that's not the issue. The issue is that this politician feels so strongly against a subject and yet they have absolutely no clue of the very simple concept behind it. Whether real or not, the concept is very simple, and what this politician said was very retarded. Yet they're so confident in their ability, so arrogant in their way of thinking that they want to lead people and decide things for them.

How can you handle so much money and not have a backup plan for in case something happens?
 

Godel

Posts: 225   +124
It gets worse. The wallet was supposedly stored on a laptop.

Robertson testified that Cotten stored the cold wallet on an encrypted laptop that only he could decrypt. Based on company records, she said the cold wallet stored $180 million in Canadian dollars ($137 million in US dollars), all of which is currently inaccessible to QuadrigaCX and more than 100,000 customers.

“The laptop computer from which Gerry carried out the Companies’ business is encrypted, and I do not know the password or recovery key,” Robertson wrote. “Despite repeated and diligent searches, I have not been able to find them written down anywhere.”
https://arstechnica.com/information...lion-as-founder-takes-passwords-to-the-grave/
 
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Karlos95

Posts: 108   +33
Yet another reason why cryptocurrency is dead.

Bitcoin is still less than $4000.

Those holders are never selling.

Exactly why the price will go up.
If people want to buy but can't it'll only make the price go up.

$4000 grand will be nothing compared to it's next bull run to $50k

DYOR
 

Dimitrios

Posts: 652   +468
Tears of joy over here. Crypto slowly tanking, cheaper video cards, RAM, SSD, CPU's cheaper, INTEL slowly sinking, Nvidia slowly sinking AMD doing good, I'm just so happy over here. I know Nvidia and INTEL will be back on their feet but the joy for the last 2 years, especially Hillary isn't president. I've waited so long for all of this. I can finally build a new PC and Windows 10 is finally maturing............... It's all Karma and they deserved it.

Keep going strong Lisa Su! Just wished I keep my AMD stock longer.
 

Karlos95

Posts: 108   +33
How do I type Laughing emojis?
To quote someone from another post - Because it suits you very well.

"You do realize the New York Stock Exchange parent company intercontinentalexchange is launching a Bitcoin crypto exchange January 24th 2019, right? Www.bakkt.com.... Also you realize Fidelity already launched Fidelity digital assets specifically for Bitcoin custody for its over 13000 institutional clients and that the NASDAQ has already said they're launching their crypto Exchange in 2019 first quarter. You also might have missed that Yale just put in 30 million dollars not too long ago into a 400 million dollar crypto fund. You're definitely going to be wrong on this one.

I just want to say you have no idea what you're talking about because apparently you do not understand crypto. You are like the equivalent of someone in the beginning when the internet came out who would say that the internet is not going to be worth anything or it's not going to go anywhere. Crypto is here to stay you might as well get used to it."
 
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mongeese

Posts: 385   +57
Staff member
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  • #10
Tears of joy over here. Crypto slowly tanking, cheaper video cards, RAM, SSD, CPU's cheaper, INTEL slowly sinking, Nvidia slowly sinking AMD doing good, I'm just so happy over here. I know Nvidia and INTEL will be back on their feet but the joy for the last 2 years, especially Hillary isn't president. I've waited so long for all of this. I can finally build a new PC and Windows 10 is finally maturing............... It's all Karma and they deserved it.

Keep going strong Lisa Su! Just wished I keep my AMD stock longer.
Lisa Su for president 2020
 
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Dimitrios

Posts: 652   +468
Lisa Su for president 2020
I was thinking about that. I never believed in a FEMALE president really, some were in the spot light but only because they pulled the woman card like how Obama won because he pulled the black card and only won because people were curious how a black president would be. I hate Hillary but Lisa Su in my honest opinion saved a company that probably no one else could of saved and I remember being stressed out and sold most of my AMD stock but the day I saw Lisa Su I knew she would save the company and I still have some shares that I bought at around $3. As a guy I'm not sexiest but Lisa is probably one of the few women that has skill and leadership. I don't think I ever looked up to a woman business wise or political wise and shunned Yahoo Female CEO which I think was a joke. I can confidently say if it wasn't for Lisa Su AMD would of failed.
 
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Lew Zealand

Posts: 1,402   +1,375
TechSpot Elite
Lisa Su for president 2020
I was thinking about that. I never believed in a FEMALE president really, some were in the spot light but only because they pulled the woman card like how Obama won because he pulled the black card and only won because people were curious how a black president would be. I hate Hillary but Lisa Su in my honest opinion saved a company that probably no one else could of saved and I remember being stressed out and sold most of my AMD stock but the day I saw Lisa Su I knew she would save the company and I still have some shares that I bought at around $3. As a guy I'm not sexiest but Lisa is probably one of the few women that has skill and leadership. I don't think I ever looked up to a woman business wise or political wise and shunned Yahoo Female CEO which I think was a joke. I can confidently say if it wasn't for Lisa Su AMD would of failed.
Never believing in a female president is sexist. Not believing in electing an incompetent president (female or not) is not sexist.
Obama wasn't some curiosity experiment about black presidents; people don't elect leaders because they think, "huh, I wonder...?" Obama won because he was charismatic, spoke well, and seemed reasonably competent for the job.
Lisa Su is clearly competent enough for the job of rescuing AMD from it's doldrums but who's to say someone else might not have done a similar or even better job? It's impossible to tell and unfortunately these experiments can only be run once.
 

QuantumPhysics

Posts: 2,900   +2,639
Never believing in a female president is sexist. Not believing in electing an incompetent president (female or not) is not sexist.
Obama wasn't some curiosity experiment about black presidents; people don't elect leaders because they think, "huh, I wonder...?" Obama won because he was charismatic, spoke well, and seemed reasonably competent for the job.
Lisa Su is clearly competent enough for the job of rescuing AMD from it's doldrums but who's to say someone else might not have done a similar or even better job? It's impossible to tell and unfortunately these experiments can only be run once.


Obama won specifically because of the disastrous economic collapse after 8 years of Bush.
 

Duke9192

Posts: 29   +28
So incompetent, yet confident enough to run and handle people's money.

This reminds me of this aspiring politician many years ago that once said something to the effect of, "If evolution is real, then why aren't monkeys turning into humans?"

Now you can believe or not believe in evolution, that's not the issue. The issue is that this politician feels so strongly against a subject and yet they have absolutely no clue of the very simple concept behind it. Whether real or not, the concept is very simple, and what this politician said was very retarded. Yet they're so confident in their ability, so arrogant in their way of thinking that they want to lead people and decide things for them.

How can you handle so much money and not have a backup plan for in case something happens?
Cool story bro, you lost me at "politician"
 
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Dimitrios

Posts: 652   +468
You lost me at Obama spoke well. That was the teleprompter that was helping him. When there wasn't a teleprompter he would stutter and pause a lot.
 

LeroN

Posts: 100   +45
It's weird that it has not been under a police investigation. The whole case is stupid. Somebody could stole the laptop anytime and ask for a buyout even not cracking it. Or anytime fire or flooding could destroy the laptop completely with all data, or any fatal accident with the CEO and etc. And that man was never worrying about so simple things? Common, he was absolutely unsecured in that case.
What's now? Still no reward for somebody who can crack it in. No requests for a reputable sequirity company's help. Even today they have no plan how to get the data back. It looks like a dark story and I would not trust them. The investors sure that the data is in the laptop but nobody can check it and supposedly never. Almost stories about the cryptocurrency are stories about some kind of fraud.
 

QuantumPhysics

Posts: 2,900   +2,639
I just want to say you have no idea what you're talking about because apparently you do not understand crypto. You are like the equivalent of someone in the beginning when the internet came out who would say that the internet is not going to be worth anything or it's not going to go anywhere. Crypto is here to stay you might as well get used to it."

I remember when Bitcoin was just $1000 and people were screaming about how everyone needed to get in on it.

I remember last year when Bitcoin hit 19,000 and speculation said it would go to 100,000.

"Buy Tron"... It's going to $100

"But Ripple"..."It's going to be $1000"...

And then I remember when Trump's tax plan came about and the government got involved.

And then I remember when Bitcoin fell below $10,000.

9000

8000

7000

6000

5000

4000

...
I'm sure after Tulipmania, there were people like you who just couldn't believe it was all over.

And by the way: :joy::joy::joy:
 

Silvernine

Posts: 55   +47
You lost me at Obama spoke well. That was the teleprompter that was helping him. When there wasn't a teleprompter he would stutter and pause a lot.
Very true about Obama. Unfortunately, Trump has a teleprompter and still can't make a coherent speech. Guess he needs to work on his reading and speaking skills.
 

Knot Schure

Posts: 292   +125
How do I type Laughing emojis?
To quote someone from another post - Because it suits you very well.

"You do realize the New York Stock Exchange parent company intercontinentalexchange is launching a Bitcoin crypto exchange January 24th 2019, right? Www.bakkt.com.... Also you realize Fidelity already launched Fidelity digital assets specifically for Bitcoin custody for its over 13000 institutional clients and that the NASDAQ has already said they're launching their crypto Exchange in 2019 first quarter. You also might have missed that Yale just put in 30 million dollars not too long ago into a 400 million dollar crypto fund. You're definitely going to be wrong on this one.

I just want to say you have no idea what you're talking about because apparently you do not understand crypto. You are like the equivalent of someone in the beginning when the internet came out who would say that the internet is not going to be worth anything or it's not going to go anywhere. Crypto is here to stay you might as well get used to it."
Careful with the use of facts & evidence on this topic, the gamer kids whom wrongly believe nobody else is allowed to use a highly parallel computing device for anything other than gaming, are both highly emotional and very toxic, when discussing this subject.

These were the sorts of people that said PayPal was merely for illicit activities, and now people are booking their holidays, and sending money to overseas friends (for a fraction of normal banking costs) and so on.

The rise and fall of BTC price is moot - it is still being widely used, but whilst we are on that subject, its 5yr chart shows it right about where it was, so again, no big deal. Anyone still crying, likely took a gamble and lost the farm, pocket money, this month's rent. I don't care.

Long-story-short, Crypto is here to stay, kids, dry your eyes, and get used to it.
 

captaincranky

Posts: 16,066   +4,866
Very true about Obama. Unfortunately, Trump has a teleprompter and still can't make a coherent speech. Guess he needs to work on his reading and speaking skills.
No, he needs to get his mouth muscles a bit more under control, so that he doesn't look like an octopus trying to eat a clam, every time he tries to speak.
 
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QuantumPhysics

Posts: 2,900   +2,639
Long-story-short, Crypto is here to stay, kids, dry your eyes, and get used to it.


It's amazing to me how many of you absolutely don't know what you're talking about or "think" you understand cryptocurrency - yet fail to understand REAL WORLD MONETARY POLICY.

It works like this:

#1 REAL WORLD MONETARY POLICY will never allow ANYTHING to compete with their stranglehold on "currency".

They (the governments) will use tax policy or flat out bans to ensure that crypto NEVER rises again like it did last year.

#2 Bitcoin and cryptocurrency are SPECULATIVE ASSETS. They don't stand on their own and never will. Their "value" is pegged to the value of the Dollar, the Yen, The Yuan, etc.

They simply do not stand on their own.

#3 People who still hold cryptocurrency are terrified to actually cash them in.

Number 1: cashing in makes them subject to capital gains tax.

Number 2: if they were to cash out at under $4000 and the **** ever rose again, they'd be screwed. Therefore, Bitcoin continues to hover around $3500 while all that ALT-coin garbage sits in the toilet.