Recent case of bankruptcy of the Canadian Crypto-currency Exchange “Quadriga”
Crypto-currencies are attractive to people who want to make illegal purchases on the Dark Web – the part of the internet that is not indexed by search engines.
Well, though everyone may not be using the Bitcoins, as this currency is widely known as, by and large, everybody is aware of the use of such currencies.
Of course, Bitcoins are not any of such coins as are shown in the following photograph.
Bitcoins do not have any physical backing.
They are just a “digital token” that can be sent electronically from one user to another, anywhere in the world.
Bitcoins first took off in 2011 after drug dealers began taking payments in Bitcoins on the black-market website known as the Silk Road. Although the Silk Road was shut down in 2013, similar sites popped up to replace it since then, to meet the demand.
But the bitcoin-transactions are not safe by any means.
It was not a solitary case that a flourishing Canadian crypto-currency exchange, “Quadriga”, which had been founded by Gerald Cotten should have gone underground.
Prior to it, in 2014, the Tokyo based “Mt. Gox”, which happened to be one of the world’s biggest online crypto-currency exchanges – too, had unexpectedly shut down its shutters after losing 850,000 Bitcoins (valued at the time at nearly $0.4bn).
After its shut down, “Quadriga” came as a blessing for the Canadian investors, since it operated from within their own country.
But it watered down their all dreams when it came to be known that its founder, Gerald Cotton, met with his end on December 9, 2018, in Jaipur where he had gone to open an orphanage, from complications related to Crohn’s disease.
Not so, because of his sudden death but because he took with him the whereabouts of the investment to the tune of about C$ (Canadian dollars) 180m in crypto-currency to his grave leaving behind him thousands of Quadriga – CX customers, in the lurch – whether they will ever see their funds again.
Surprisingly, none of them ever bothered to know that this Exchange did not have any offices, nor had any employees and even any bank-accounts worth the salt, though it used some third-party contractors to handle some of the additional work, including payment processing.
It was just a one-man band run entirely by Cotten himself from his own home in Fall River, Nova Scotia just on his laptop and only he knew the “passwords” to operate their accounts.
In an affidavit, his widow, Jennifer Robertson has mentioned that she has searched their home through in and out and even other properties for business records related to Quadriga but to no avail declaring that the laptop, on which he conducted all the business, is encrypted and she doesn’t have the password or the recovery-key to access any data posted on it.
So the death of Cotten has turned into a nightmare for all the investors more so because even the investigator, who had been hired to assist in recovering any records, has also raised his hands. He has not met with any success to recover any passwords because everything that is recorded on the laptop has been written in an encrypted form though IBC has frozen five accounts containing about Canadian $26m linked to Quadriga’s payment processor in a dispute over the real owners of the funds, an issue that ended up in court.