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

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6 years ago

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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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Kremlin denies US media reports on Donald Trump’s phone call with Vladimir Putin

Donald Trump said on the campaign trail that he could end the fighting within hours and has indicated he would talk directly with Russian President Putin.

Published

2 weeks ago

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November 11, 2024

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Kremlin denies US media reports on Donald Trump’s phone call with Vladimir Putin

The Kremlin today denied a US media report that Russian President Vladimir Putin and US president-elect Donald Trump had spoken on the phone last week about the Ukraine conflict.

Earlier on Sunday, The Washington Post reported that Donald Trump spoke to Vladimir Pution on call, urging him not to inflame the conflict. Speaking on the matter, Kremlin spokesman Dmitry Peskov told the media that the report was completely false information, and denied any phone call took place.

It was reported that US President-elect Donald Trump has spoken to Russian President Vladimir Putin and urged him not to escalate the war in Ukraine. It said that Donald Trump held the call from his Mar-a-Lago estate in Florida on Thursday, just days after his stunning election victory over Democratic rival Kamala Harris. The report also mentioned that both the leaders expressed an interest in further conversations to discuss the resolution of Ukraine’s war soon.

Notably, Donald Trump said on the campaign trail that he could end the fighting within hours and has indicated he would talk directly with Russian President Putin. However, the US President elect has not said how he intends to strike a peace deal or what terms he is proposing.

Donald Trump’s election is seen as carrying the potential to upend the almost three-year Ukraine conflict, as he insists on a quick end to the fighting and casts doubt on Washington’s multi-billion dollar support for Kyiv.

Meanwhile, Ukrainian President Volodymyr Zelensky spoke with Trump on Wednesday, with the Republican’s billionaire backer Elon Musk also notably joining them on the call. Volodymyr Zelensky described the call as excellent, adding that he and Trump had agreed to maintain close dialogue and advance our cooperation.

Additionally, the outgoing Democratic administration of President Joe Biden has confirmed that it will send as much aid as possible to Ukraine before Trump’s inauguration on January 20.

Joe Biden’s National Security Advisor Jake Sullivan said the White House aims to put Ukraine in the strongest possible position on the battlefield so that it is ultimately in the strongest possible position at the negotiating table.

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India calls out Canada’s move to ban Australia Today for airing S Jaishankar’s press conference

The MEA said that these actions yet again highlight the hypocrisy of Canada towards freedom of speech.

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2 weeks ago

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November 7, 2024

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India calls out Canada’s move to ban Australia Today for airing S Jaishankar's press conference

A few hours after Australia Today aired External Affairs Minister S Jaishankar’s press conference in Australia, Canada banned the outlet. The External Affairs Minister gave remarks on the India-Canada diplomatic standoff. 

Reacting to this, India on Thursday said it was surprised by Canada’s move to ban the outlet and emphasized that it highlighted Ottawa’s hypocrisy towards freedom of speech. Australia Today, which is an important outlet for the Indian community in the country, had aired the joint press conference of S Jaishankar and his Australian counterpart Penny Wong in Canberra.

In a weekly media briefing, MEA spokesperson Randhir Jaiswal said that they understand that the social media handles, pages of this particular outlet, which is an important diaspora outlet, have been blocked and are not available for viewers in Canada. He continued that this happened just an hour or a few hours after this particular handle carried the press conference of S Jaishankar with Penny Wong. He called out the incident, mentioning that they are surprised, and the matter looks strange to them.

He further underlined that these are the actions which yet again highlight the hypocrisy of Canada towards freedom of speech. He noted that the External Affairs Minister spoke about three things: Canada making allegations and a pattern had developed without any specific evidence, surveillance of Indian diplomats in Canada, which he termed as unacceptable, and  the political space which has been given in Canada to anti-India elements. 

With this one can draw conclusions, why Australia Today channel was blocked by Canada, the spokesperson said. Australia Today focuses on news and analytical pieces related to the Indian community in Australia and elsewhere across the world.

This incident follows days after devotees were attacked by pro-Khalistani at a Hindu temple in Canada’s Brampton, with S Jaishankar calling it deeply concerning. Furthermore, Prime Minister Narendra Modi also condemned the attack and said that there were cowardly attempts to intimidate Indian diplomats.

The diplomatic standoff between India and Canada began in September last year when Canadian Prime Minister Justin Trudeau alleged that Indian government agents might have been involved in the killing of Khalistani terrorist Hardeep Singh Nijjar, a claim outrightly rejected by New Delhi.

Later in October 2024, ties between both the countries nosedived when Canada termed the Indian High Commissioner a person of interest in its investigation into Nijjar’s murder. Issuing a strongly worded statement, India dismissed the fresh charge and recalled the envoy and some diplomats, while expelling six Canadian officials, including Canada’s acting High Commissioner.

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Latest world news

PM Modi congratulates Donald Trump on winning US President election

The Prime Minister urged Trump to work for the betterment of the people and to promote global peace, stability and prosperity.

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2 weeks ago

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November 6, 2024

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Prime Minister Narendra Modi on Wednesday congratulated Donald Trump on winning the 2024 US Presidential election and said he is looking forward to renewing their collaboration to further strengthen the India-US partnership.

The Prime Minister urged Trump to work for the betterment of the people and to promote global peace, stability and prosperity.

“Heartiest congratulations my friend @realDonaldTrump on your historic election victory. As you build on the successes of your previous term, I look forward to renewing our collaboration to further strengthen the India-US Comprehensive Global and Strategic Partnership. Together, let’s work for the betterment of our people and to promote global peace, stability and prosperity,” PM Modi posted on his X handle.

With the results being announced for the 2024 US election on November 6, Trump became the 47th President of the United States.

Former US President Trump appeared to be on track for a remarkable political comeback in the White House race. Projections suggested that he was poised to secure the necessary 270 electoral college votes, effectively blocking Democratic candidate Kamala Harris from winning the election.

The relationship between Trump and Modi has been characterised by robust diplomatic ties, strategic collaboration, and a noticeable personal rapport. Their friendship was prominently displayed during major events such as “Howdy, Modi” in Houston in 2019 and “Namaste Trump” in Ahmedabad in 2020, where they addressed large audiences and expressed their mutual respect.

On a strategic level, Trump and Modi found common ground in matters of defense and security, both adopting a strong stance against terrorism, which reinforced their alliance, particularly concerning threats from Pakistan.

As he approaches a notable victory in the US election, Republican Presidential candidate Trump expressed gratitude to his supporters today, calling it a magnificent victory for the American people. He also referenced the assassination attempt on July 13, stating, “God spared my life for a reason.”

The 78-year-old candidate is currently projected to secure 267 electoral college votes, just three shy of the decisive 270, while his opponent, incumbent Vice President Kamala Harris, holds 224 electoral votes.

Trump described the Republican campaign as the greatest political movement of all time, asserting, “We are going to help our country heal, secure our borders, and we made history for a reason tonight. This is an incredible political victory. I want to thank the American people. I will fight for you and your family with every breath I have.”

He noted that Democrats are now looking at a projected total of 315 electoral votes.

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