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Bitcoin, other cryptocurrency holders’ funds in limbo as CEO with password dies in Jaipur

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[vc_row][vc_column][vc_column_text]At least C$190 million ($145 million) of investors in Bitcoin and other digital currency holders got lost in cyberspace after the chief executive of cryptocurrency exchange QuadrigaCX, Gerald Cotten, the only person with password and security keys to access the money, died suddenly while in Jaipur, India.

Cotten, 30, died of complications from Crohn’s disease on December 9.

While efforts to crack the code and retrieve the money have not yielded results yet, the Vancouver-based company had moved court seeking protection from creditors after weeks of attempting to “locate and secure our very significant cryptocurrency reserves” following Cotten’s death.

The company, QuadrigaCX, said in court filings that the CEO, Gerald Cotten, was the only person who knew the security keys and passwords needed to access the funds.

AFP reported that a Canadian court on Monday granted bankruptcy protection to the company. Another report said that the Supreme Court of Nova Scotia on Tuesday approved the company’s request for protection against creditors for 30 days and the appointment of accounting firm Ernst & Young to sort out Quadriga’s finances and explore a possible sale.

Cotten’s widow Jennifer Robertson said the company has been unable to access an encrypted computer that Cotten reportedly used to store the cryptocurrencies to 1,15,000 users. “I do not know the password or recovery key,” she said. “Despite repeated and diligent searches, I have not been able to find them written down anywhere.”

She added that an expert “has had some limited success in recovering a few coins and some information on Gerry’s cellphones and other computer, but not yet from the main computer he used to conduct business [with]”.

Robertson’s affidavit stated that Cotten’s laptop, email addresses and messaging system were encrypted to prevent them from being hacked, Bloomberg reported. Cotten was the only person in charge of funds and coins as well as the banking and accounting side of the business.

Cotten filed a will on Nov 27, 2018, 12 days before his death listing substantial assets, according to court documents, said a report on NDTV. He left all his assets to his wife, Jennifer Robertson, and made her the executor to his estate, the documents show.

The exchange, launched in December 2013, allowed users to deposit cash or cryptocurrency through its online trading platform, storing the digital coins on blockchain ledgers that are accessible only by an immutable alphanumeric code. The company had 363,000 registered users, of which 92,000 have account balances owing to them in cash or cryptocurrencies, according to court filings. Cotten was the sole officer and director.

The firm can’t retrieve about C$190 million in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, nor can Vancouver-based Quadriga CX pay the C$70 million in cash those clients are owed.

Cotten was always conscious about security – the laptop, email addresses and messaging system he used to run the 5-year-old business were encrypted. He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, to avoid being hacked, moved the “majority” of digital coins into what’s known as cold storage, or unconnected to the internet, the filing said.

The problem is, Robertson said she can’t find his passwords or any business records for the company. Experts brought in to try to hack into Cotten’s other computers and mobile phone met with only “limited success” and attempts to circumvent an encrypted USB key have been foiled, she said in the court filing.

The company’s inability to release its clients’ money has created an uproar among angry — and highly suspicious — investors.

While other crypto exchanges have lost their clients’ money, this appears to be the first one that has said it actually lost the keys to its accounts.

Some Quadriga clients who claim they’re owed money are pursuing their own legal avenues, including software engineer Xitong Zou of Orillia, Ontario. The client claims to be owed about C$560,000 from Quadriga — “one of the largest individual affected users” — according to the affidavit filed in a Halifax court on Feb. 5.

Xitong Zou and others are part of an informal committee of affected users that retained law firm Bennett Jones LLP and McInnes Cooper to represent them during the creditor protection proceedings.

Other customers named in the affidavit include: Tong Zou, with C$560,000 outstanding Epsilon One Pty Ltd., with C$1.04 million and $81,697 outstanding Matthew Leudy, with C$438,677 outstanding Benoit Gagne, with C$371,000 outstanding Block Trading Corp., with C$678,043 Tin Do, with C$525,000 and 523 Ethereum.

Quadriga’s platform went offline Jan. 28, and frustrated investors have taken to Reddit and Twitter to discuss their investigations into the company’s claims and potential lawsuits. Some questioned whether Cotten had indeed died — or whether, perhaps, he had faked his death to pull off what is known as an exit scam.

“The death came at a very odd time in the history of that company,” said Emin Gün Sirer, a professor at Cornell University and co-director of the Initiative for CryptoCurrencies and Contracts, according to a New York Times (NYT) report.

He noted that various online sleuths had been searching the blockchain, a ledger that can be updated by decentralized networks, for evidence of where Quadriga had stored its assets, but had found none, which raised red flags.

When it shut down, Quadriga’s platform had 363,000 users, and 115,000 of them had balances in their accounts: about $180 million in cryptocurrency and $70 million in Canadian currency, the court documents state. The exchange enabled trades of bitcoin, Litecoin and Ether, plus other types of cryptocurrency. The largest user claim was valued at about $70 million.

Quadriga was one of 237 widely recognized public cryptocurrency exchanges worldwide, Sirer told NYT. In terms of daily trade volume, it was ranked in the middle of the pack as of October, according to the website CoinMarketCap.

The exchange kept currency in “hot wallets,” which were connected to the internet and could quickly fulfill withdrawal requests, and “cold wallets,” which were kept offline and stored physically, such as on a USB stick, making them more secure, according to court papers.

Cryptocurrency investors, on social media and in interviews, questioned why a chief executive would be the sole point of access to such a vast sum.

In an initial report to the court, Ernst & Young wrote that it was facing an extraordinary set of case facts. Quadriga had no discernible accounting system and no bank account, according to the filing. Cotten typically sent directions to release payments, which were made through third-party payment processors, to employees by email, and payment inflows and outflows “were not systemically tracked,” Ernst & Young wrote.[/vc_column_text][/vc_column][/vc_row]

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Azerbaijan plane crash sparks speculation of missile strike

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Wreckage of Azerbaijan Airlines plane with visible damage near Aqtau, Kazakhstan

An Azerbaijan Airlines Embraer 190 jet, which crashed near Aqtau in Kazakhstan on Christmas Day, has raised questions about a possible accidental strike by a Russian missile. The flight was en route from Baku to Grozny, Russia, when it went down, killing 38 of the 67 people on board. Among the survivors were two young girls, aged 11 and 16.

Investigation points to missile damage

Aviation and military experts have suggested that the crash may have been caused by a surface-to-air missile or anti-aircraft fire. Reports from media outlets such as the Wall Street Journal and Euronews highlighted shrapnel-like damage to the plane’s fuselage and tail section, consistent with missile strikes.

Footage shared online showed holes resembling shrapnel marks, adding weight to this theory. Matt Borie, Chief Intelligence Officer at Osprey Flight Solutions, told the Journal that the wreckage and security conditions in the region suggest the aircraft may have been hit by anti-aircraft fire.

The crash occurred in an area where Ukrainian drone activity had been reported. Grozny, the destination city, is heavily guarded by Russian anti-aircraft systems due to the ongoing conflict with Ukraine.

Survivors report explosions

Passengers seated in the tail section of the plane, where all survivors were located, reported hearing loud explosions shortly after the plane’s request to land at Grozny airport was denied. Visuals captured the aircraft struggling to maintain altitude before crashing into a field about three kilometers from Aqtau airport.

Azerbaijan Airlines initially attributed the crash to a bird strike but later withdrew this claim. The plane’s black box has been recovered, and investigators will examine flight data and cockpit recordings for further insights.

Potential precedent

If a Russian missile is confirmed as the cause, this would mark the second time a commercial plane has been shot down in the region. In 2014, Malaysian Airlines flight MH-17 was downed by a Russian-made missile over eastern Ukraine, killing all on board.

Official responses

Kazakh officials, including Senate Speaker Maulen Ashimbayev, have urged patience until the investigation concludes, stressing that no party has an interest in concealing information. Kremlin spokesperson Dmitry Peskov condemned premature speculation.

National mourning in Azerbaijan

Azerbaijan President Ilham Aliyev declared a national day of mourning and canceled a planned visit to Russia. In a statement, Aliyev expressed condolences to the victims’ families and called for a thorough investigation.

As the investigation continues, questions remain about the safety of civilian aircraft in a region embroiled in conflict.

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Washington Sundar’s inclusion in the fourth Test: Will he make a significant impact for India?

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Washington Sundar

Washington Sundar has been thrust into the spotlight once again as he made his return to India’s playing XI for the fourth Test against Australia at the Melbourne Cricket Ground. His inclusion, which came at the expense of Shubman Gill, has sparked a flurry of discussions, both on social media and among cricket experts, about his role in the team, his credentials as an all-rounder, and what his performance will mean for India’s chances in the ongoing Border-Gavaskar Trophy.

Sundar, who has previously impressed with his all-round abilities, has had a tumultuous journey with the Indian cricket team, especially in the Test format. Known for his ability to bowl tight off-spin and contribute with the bat, Sundar’s most memorable performance came in India’s historic win over Australia in the 2020-21 series. However, it is his return to the Test squad for this high-profile series that has gotten the cricket world talking.

His inclusion comes in the wake of Ravichandran Ashwin’s retirement from limited-overs cricket and his exclusion from the playing XI in the first few Tests of the series. With Ashwin’s absence, Sundar was given an opportunity to step into the spin department alongside Ravindra Jadeja, especially after a stellar performance against New Zealand earlier this year. Sundar claimed seven wickets in a single innings during that match, putting in a performance that elevated his reputation as a reliable bowling option. This made his re-entry into the squad even more anticipated, with many hoping for him to make an immediate impact.

However, while Sundar’s return has been welcomed by many, not all are convinced about his role as an all-rounder in the traditional sense. Former cricketer Sanjay Manjrekar, known for his insightful commentary, expressed his doubts over Sundar’s credentials as an all-rounder, suggesting that the young player’s contributions with the bat and ball have not always been consistent enough to fulfill the high expectations that come with such a role. Manjrekar also included Nitish Reddy in his criticism, questioning whether both players could truly fulfill the versatile role needed in modern Test cricket.

For Sundar, however, his performance will likely speak louder than any criticism. The pressure on him to perform in a Test series as crucial as this one against Australia is immense, and many eyes will be on him to prove his worth. With the likes of Marnus Labuschagne, Usman Khawaja, and Steve Smith in Australia’s formidable lineup, Sundar’s ability to deliver with the ball could be pivotal in the context of the game.

Despite the debate, Sundar’s skills as a bowler have been widely recognized. His calm demeanor and knack for bowling tight lines have helped him earn the confidence of the Indian team management. What sets him apart is his maturity at a young age, especially in pressure situations. Though his batting has not always been as consistent as his bowling, his ability to contribute with the bat adds another dimension to his utility in the team.

The 24-year-old has made his way through the ranks, and this series offers him another chance to prove his mettle. His role in the ongoing series could prove vital, particularly in India’s bid to retain the Border-Gavaskar Trophy. If Sundar can deliver with both bat and ball, he could become a regular feature in the Indian Test team, solidifying his position as a key all-rounder in the squad.

With the series tied and both teams fighting hard for supremacy, Sundar’s performance could be a game-changer for India. His return is symbolic not just of the changes in the Indian squad but of the continued shift towards integrating youth and fresh talent into the team. As the series progresses, all eyes will be on Sundar, who now faces the challenge of turning potential into performance and answering the critics who have questioned his place in the Test team.

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Cricket news

India fight back as Australia take the edge on Day 1 of Boxing Day Test

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Day 1 of the fourth Test between India and Australia at the iconic Melbourne Cricket Ground saw Australia end the day at 311/6, holding a slight advantage despite a spirited Indian fightback led by Jasprit Bumrah.

Steve Smith, steady as ever, remained unbeaten on 68, joined by Pat Cummins (8*) at the crease. The day belonged to Australia’s batting lineup, which delivered a solid performance on a favorable pitch.

Debutant Sam Konstas was the highlight of the Australian innings, crafting an impressive 60 runs in his first Test appearance. The 19-year-old showcased maturity beyond his years, dispatching the Indian bowlers with confidence. His knock complemented the contributions from Usman Khawaja (57) and Marnus Labuschagne (72), who anchored Australia’s innings with composed fifties.

India’s bowling unit, spearheaded by the ever-reliable Jasprit Bumrah, kept the visitors in the contest. Bumrah’s figures of 3/75 reflected his knack for breaking partnerships at crucial moments. Supporting him, Ravindra Jadeja, Washington Sundar, and Akash Deep each claimed a wicket to prevent Australia from running away with the game.

Australia’s playing XI featured a formidable lineup, including skipper Pat Cummins, Mitchell Starc, and spinner Nathan Lyon. India fielded an interesting combination, with Rohit Sharma leading a side that featured young talents like Yashasvi Jaiswal and Nitish Kumar Reddy alongside experienced campaigners Virat Kohli and Rishabh Pant.

As Day 1 concluded, the match remained finely poised. While Australia’s top order laid a strong foundation, India’s bowling ensured they stayed in contention, setting the stage for an intriguing Day 2 of the Boxing Day Test in the Border-Gavaskar Trophy 2024/25.

The stakes remain high as both teams seek to assert dominance in this crucial encounter.

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