QuadrigaCX Founder Allegedly Stored Private Keys In A Safety Deposit Box

Marco Green
February 19, 2019

The QuadrigaCX exchange was closed on January 28th, over a full month after Cotten's death due to complications of Crohn's disease whilst opening an orphanage in India on December 9th, The period in between allowed Gerald Cotten's assets to be transferred to his wife in his will.

Gemini has since created a high-tech version of the process to hold client money, and accessing the firm's so-called digital wallets requires multiple signatures from cryptographically sealed devices never linked to the internet.

To recap, cryptocurrency exchange Quadriga representatives can't regain access to the exchange's assets after a sudden death of its founder Gerald Cotton.

Cotton first discussed what losing the keys could mean by saying that it is exactly like "burning cash" and once lost the keys can never be retrieved and you will be unable to access your tokens. "It's impossible to retrieve those", Cotten said. However, the deceased may have stored the keys in a safety deposit box.

He further explained that with the keys offline in a safety deposit box, one could not worry about losing or having their Bitcoin (BTC) stolen, "unless someone broke into the bank and stole the safety deposit box to have the private key".

At QuadrigaCX, we're obviously holding a bunch of Bitcoins that belong to other people who have put them onto our exchange.

Ernst and Young reported that someone working for QuadrigaCX "inadvertently" transferred 103 Bitcoins worth approximately $468,675 into a cold wallet that was and is, beyond the reach of the QuadrigaCX company.

He said that the private key is a complex code that is needed to send Bitcoins while the public is simpler and is an address on which you can receive Bitcoins.

Furthermore, he revealed that the best way to store the chain of numbers and letters which is referred to as private keys is to print them out and keep them in a safety deposit box.

"Essentially we put a bunch of paper wallets into the safety deposit box, remember the addresses of them", he said. The brothers cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key. "Despite repeated and diligent searches, I have not been able to find them (the passwords) written down anywhere".

On February 5th, the exchange was granted creditor protection for 30 days, shielding it from investor lawsuits.

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Other reports by Click Lancashire

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