It seems that the story on QuadrigaCX with the loss of user accounts on the largest canadian Bitcoin exchange can grow into the largest theft in the history of the country.
As recently reported, its founder, Gerald Cotten, suddenly died from Crohn’s disease at the age of 30 years in Jaipur, India, in early December, 2018.
Moreover, according to the claims of all employees of the exchange, he was the only one who had access to cold wallets. In accordance with the filed lawsuits, QuadrigaCX to its clients of approximately 250 million canadian dollars ($190 million).
As of the end of January 2019, more than 115 000 users had a positive balance in their accounts QuadrigaCX in the amount of 180 million canadian dollars in bitcoin and the rest 70 million in Fiat. At this point, the allocation of funds between the hot and cold wallet of the exchange is unclear.
Unexpected movement Litecoin
The advantage of blockchain lies in its transparency and immutability. So interesting was the discovery that was conducted a new study of cold Quadriga Litecoin wallet. It showed the movement of funds from the wallet of the exchange after the death of the founder, as you know, to transfer funds from any purse you must have access to its private keys. This proves that the events with the sudden death of Cotto can quickly turn into major fraud or robbery.
Despite the fact that Litecoin is not the dominant cryptocurrency in the number of blocked Quadriga funds the answer with his movement on the stock exchange after the founder’s death may give some clues to this mystery, which, ultimately, could indicate another large-scale fraud.
The result is the proof about the demise of Cotto, confirmed by the death certificate issued by the Indian authorities. However, many victims do not believe in it, expressing doubt that a reasonable person could come to treat complex disease in the country, far from their best level of health care.
The drawbacks of the blockchain and necessary solutions
Particularly, numerous questions arose in connection with the statement that the exchange “lost” access to $190 million.
The case of the sudden death of Cotto, and the fact that he was the only one with access to the private keys of cold wallets, requires finding solutions to such problems in the future.
Some companies are already developing the solution. One of them is the function of the purse, which automatically puts him money, if it has not been accessed for a certain period of time (e.g., six months). Such a function could resolve the situation at QuadrigaCX.
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Tags: Litecoin QuadrigaCX