Did the Founder of QuadrigaCX Place His Private Keys in a Safety Deposit Box?
QuadrigaCX, a Canadian crypto exchange, has been receiving a great deal of heat lately for lost funds. And worse yet, it could be the case that the company’s deceased founder may have stored the exchange’s private keys in a safety deposit box.
In 2014, former founder Gerald Cotton, was interviewed on the True Bromance Podcast. During his interview, he warned that cold storage systems can potentially lose keys, which would then prevent access to the cold storage mechanism. As he stated,
“Even the U.S. government, with the biggest computers in the world, could not retrieve those coins if you’ve lost the private keys. It’s impossible to retrieve those.”
He also added that one of the best ways to keep private keys is by printing and storing them in a safety deposit box. In his words,
“So that way you can never have your Bitcoin (BTC) stolen, unless someone, like, breaks into the banks, steals your safety deposit box, and gets into your private keys and so forth.”
It also seems that in this case, he may have done just that. Cotton further added:
“Essentially we put a bunch of paper wallets into the safety deposit box, remember the addresses of them. So we just send money to them, we don’t need to go back to the bank every time we want to put money into it. We just send money from our Bitcoin app directly to those paper wallets, and keep it safe that way.””
The platform has been unable to access its cold wallet so far because Cotton was the only one who seemingly had access to the keys. This is troublesome, especially because the platform owes CA $260 million to users and it is currently facing insolvency.
The company is also going through the court system in Canada. The Nova Scotia Supreme Court delayed a decision concerning legal representations for the platform’s customers who have lost funds. The Court is also set to release a decision this week.