BitGo Announces $100M Insurance for Its Customers’ Crypto Assets Through Lloyd’s of London

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BitGo Announces $100M Insurance for Its Customers’ Crypto Assets Through Lloyd’s of London

Thanks to the new BitGo’s initiative, customers’ crypto holdings can be insured for up to $100 million through Lloyd’s of London.

BitGo Announces $100M Insurance for Its Customers’ Crypto Assets Through Lloyd’s of London

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Source: CoinSpeaker

In a 30-Minute Video, Victim Lays Out How He Lost $400K in Crypto on QuadrigaCX

Since the QuadrigaCX story has crossed paths with the world’s largest business and crypto news outlets, seemingly little attention has been given to this debacle’s victims. Outlets, such as Bloomberg, CNN Business, among others, refer to the creditors as a “they,” making it tough to remember that there are crypto investors behind each lost dollar.
But, the fact of the matter is that there are thousands, if not tens of thousands of victims, who are wallowing and sulking, as many lost thousands in fiat and Bitcoin holdings. Yet, some have done their utmost to push the envelope, clamoring to get their stories pushed to press in a bid to spark some much-needed action in Canadian courts.
Tong Zou, a Canadian-born Silicon Valley engineer that recently upped and left for Vancouver, took to Youtube recently to issue a heartfelt tell-all about how he got caught up in this whole imbroglio.
How Tong Zou Lost $422,000 Trading Bitcoin On Quadriga
As reported by NewsBTC, Tong gave a brief synopsis of his harrowing story to Bloomberg in an exclusive phone interview. Long story short, when the engineer chose to repatriate to Canada, Tong decided to move his funds from his American to his Canadian bank account through QuadrigaCX, rather than traditional means. But when he deposited his $422,000 worth of Bitcoin on the exchange to issue a Canadian dollar denominated withdrawal,
But according to a recent Youtube tell-all, his comments to Bloomberg were just the tip of the iceberg.

He explained that in late-2017, his Silicon Valley peers were cashing in on the crypto craze, as he sat on the sidelines. But as the market peaked, he FOMOed in, taking out three self-described “stupid” loans from the bank to invest into cryptocurrencies, like Bitcoin, Ethereum, XRP, Cardano, among other popular assets.
Tong accentuated the fact that he “lost a lot of money,” but did his utmost to amend his loan situation by allocating half of his paycheck to slowly satisfy his debts. Eventually, the developer decided that to pay his loan in full, he should liquidate his entire position in a Bay Area apartment. And that he did, leaving him with approximately $400,000 and no outstanding debts.
As he already had plans to move to Vancouver, where QuadrigaCX is purportedly located, Tong started to look into ways to move his capital into Canadian banks quickly, so he could take advantage of what he thought were good exchange rates. Eventually, he decided on QuadrigaCX, as the exchange not only had a 10% risk premium (red flag), but the ability for Tong to make investments that could make his savings appreciate too.
Emotionally, the former BitTorrent developer thrust his money onto the exchange, which he now acknowledges as a “Ponzi scheme,” in hopes of making money due to QuadrigaCX’s premium.
Yet, months later, we now know that Tong never got his withdrawal. But interestingly, the Ontario-born Canadian claimed that he “deserved to lose the money,” explaining that he was reckless, greedy, and impatient with this whole situation. He even explained that in his eyes, money isn’t the key to happiness. But, this didn’t discount the fact that QuadrigaCX’s sudden closure lost him his life savings, putting him between a rock and a hard place.
What’s Next For The QuadrigaCX Victims?
Tong’s statements were ones made by someone with no hope. But, some believe that creditors still have a chance, albeit slim, at recuperating their millions in losses, or at least a portion of them.
While ~$150 million in assets were reportedly lost to the ether, there’s a chance that the owed sum — QuadrigaCX’s crypto asset debts — are much lower than that jaw-dropping figure. And with Jennifer Robertson, Cotten’s wife, looking to liquidate much of her estate’s assets, there’s a fleeting chance that payments, whether in crypto or fiat, may start to come the way of victims.

Per a copy of Cotten’s most recently will, which was signed a mere two weeks prior to his Crohn’s disease-induced death in India, primary beneficiary Robertson was left with a copious amount of assets.
In fact, the will stipulate that should he pass, his wife was to be left with a Jeanneau 51 sailboat, purportedly sold for $500,000 Canadian, vehicles, an aircraft, along with a handful of pieces of real estate scattered across Canada. These assets are likely worth well in excess of $10 million Canadian.
Related Reading: QuadrigaCX Imbroglio Continues: Cotten Mentioned Bitcoin Key Loss In 2014
But even if the court rules that the fiat received from the sale of Robertson’s assets should be fully allocated to the victims’ pockets, which could be unlikely, this process could take upwards of one year. That’s the M.O. of the legacy court system anyway.
Yet, the victims of this fracas are still grasping the ring they were thrown. Only time will tell whether they will sink or stay afloat.
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The post In a 30-Minute Video, Victim Lays Out How He Lost $400K in Crypto on QuadrigaCX appeared first on NewsBTC.
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QuadrigaCX Imbroglio Continues: Cotten Mentioned Bitcoin Key Loss In 2014

Since NewsBTC’s last updates on the QuadrigaCX situation, little knowledge has been garnered about the current whereabouts or legitimacy of the exchange’s supposed Bitcoin, Ethereum, Litecoin, and other digital asset holdings. But, this hasn’t stopped astute industry participants from scouring the web for clues, as victims continue to clamor for their hard-earned funds.
Bitcoin Private Key Dangers
In what can only be described as a jaw-dropping find. Doug Alexander, a Bloomberg journalist focused on Canadian markets, recently claimed that Gerry Cotten of QuadrigaCX was well aware of private key management. Per Alexander, in a February 2014 installment of the so-called “True Bromance Podcast,” the then Vancouver-based Cotten warned of the importance of keeping Bitcoin keys under lock and key.

Speaking to the show’s hosts, he remarked that losing keys is like “burning cash in a way,” adding that even if the world’s most endowed supercomputers were to try cracking Bitcoin, they wouldn’t be able to. In other words, “it’s impossible to retrieve [private keys].”
This, of course, is an odd comment, especially coming from the now-deceased founder of a crypto platform that purportedly lost over $150 million in assorted crypto assets.
But, this is where Cotten’s podcast appearance turns from odd (in retrospect) to confusing. The QuadrigaCX chief executive and founder, who died in India due to Crohn’s disease, made mention of Bitcoin paper wallets. He even remarked that at the time, his firm was holding his customers’ funds in offline paper wallets, situated in “our bank’s vault in a safety deposit box.” Giving some rationale to this move, the Canadian entrepreneur stated that this was the “best way to keep the coins secure.”
It is unlikely that QuadrigaCX’s remaining funds are left in safety deposit boxes scattered across Canada, but such a comment have made some think and ponder the details of this debacle.
Related Reading: Controversial Crypto Exchange QuadrigaCX Linked in Binary Options Scam
QuadrigaCX Loses Additional Funds In Mishap
This story comes as Ernst and Young (EY), a “Big Four” firm actively overseeing this case, told Canadian officials that someone at the embattled exchange sent $500,000 Canadian worth of hot wallet funds into the purportedly unaccessible cold wallets. The sum purportedly amounted to approximately 103 Bitcoin. No other crypto assets were sent from QuadrigaCX’s hot wallets, now under the control of EY.

It is unclear what the financial incumbent will do with the 51 Bitcoin, 800 Litecoin, 950 Ethereum, among a smattering of other assets left in the hot wallets. While the sudden move of hundreds of thousands to locked wallets could have been an innocuous but expensive fat-fingered mistake, some have begged to differ.
Researchers are hard at work doing their utmost to determine if the disgraced platform ever held the sum Cotten’s widow reported in the original affidavit.
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Bad Streak for Bitcoin Exchange QuadrigaCX: Another $400k Lost

CoinSpeaker

Bad Streak for Bitcoin Exchange QuadrigaCX: Another $400k Lost

Canadian crypto exchange QuadrigaCX has faced with new misfortune. It moved 103 Bitcoins to a wallet that it doesn’t have access to.

Bad Streak for Bitcoin Exchange QuadrigaCX: Another $400k Lost

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Source: CoinSpeaker

Controversial Crypto Exchange QuadrigaCX Linked in Binary Options Scam

Independent researchers have identified financial links between crypto exchange QuadrigaCX and a shady company.
The accusation surfaced after Spoofy McSpoofface, a Twitterati, found that the Canadian exchange had asked its customers to deposit money into a bank account owned by Hong Kong-based Valoris HK Ltd. The profile shared the screenshot of a Reddit thread from 2018 to validate its claims.

Like other forex and binary options scammers, Quadriga directed some of its customers to deposit money into "Valoris HK Ltd.," at Bank Pekao in Warsaw, Poland. #cryptocapitalhttps://t.co/UJLWwgQWGP pic.twitter.com/ZnjTmtPAdf
— Spoofy McSpoofface (@ExkrementKoin) February 11, 2019

In the thread, an unverified QuadrigaCX user claimed that the exchange was asking him via email to wire his deposits to Volaris’ bank account. In its response, QuadrigaCX confirmed that Crypto Capital, their international payments company, had sent the concerned email. It had explained:
“For wire transfers, we use the international payments company, Crypto Capital. These instructions are for our account with them. Unfortunately, banks in Canada will not permit Bitcoin companies to have bank accounts at their institutions.”
Valoris Connected to Binary Options Scammers?
The case, as mentioned above, confirmed that QuadrigaCX was using an offshore company called Valoris HK Ltd. for receiving customers’ deposits. QuadrigaCX admitted having a business relationship with the Hong Kong firm. Except, a separate report indicated that the company was also accepting deposits for forex and binary options scammers.
Spoofy McSpoofface posted a screenshot of an article published December 11, 2017, on Times of Israel, reporting that how a Canadian investor lost his life savings in an options scam. The victim stated that he had deposited $134,000 to the bank account of the same Valoris HK Ltd. Excerpts from the article:
“Curiously, an online search for this bank account reveals that it, or an account by the same name at Bank Pekao, is still actively receiving funds. The same account has been used to accept payments for TD Markets – a Binary Options and forex trading site – as well as QuadrigaCX, a bitcoin exchange that claims to be based in Vancouver, Canada.”
QuadrigaCX did not publish an independent financial audit since September 2015. Therefore, the exact sum of money transferred to or withdrew from the Valoris HK account could not be verified at press level.
$190 Million in Crypto Disappeared following QuadrigaCX Founder’s Death
By 2015, the only executive QaudrigaCX was left with was co-founder Gerald Cotten. He passed away in January 2019, allegedly taking the passwords of QuadrigaCX’s $190 million worth of crypto-reserves to his grave. The exchange later admitted that that loss of reserves had made them insolvent. Meanwhile, it filed for creditor protection at the Supreme Court of Nova Scotia. The court granted them 30-day protection.
Cotten’s death raised concerns, with many accusing the founder of faking it. Independent researchers later found that QuadrigaCX never had any crypto reserves and that the exchange was merely pitting traders against each other for executing their deposits’ and withdrawals’ requests.

1/ After a couple of days of combing through wallet explorers, examining TX IDs, addresses, and coin movements, I present to you all an analysis of QuadrigaCX's Bitcoin Holdings: https://t.co/HsAZFIjbmQ
— CryptoMedication (@ProofofResearch) February 3, 2019

The Ontario Securities Commission had declared that it would look into QuadrigaCX for potential regulatory anomalies. However, whether or not there would be a federal investigation into the $190-million scandal is unclear at this point.
NewsBTC is attempting to reach Valoris HK for press statements. Kindly return to this space for more updates.
The post Controversial Crypto Exchange QuadrigaCX Linked in Binary Options Scam appeared first on NewsBTC.
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Top Trending Cryptocurrency News of The Week: Jack Dorsey, QuadrigaCX, Facebook and VanEck Among Major Newsmakers

Key highlights

Jack Dorsey and his love for Bitcoin
Argentina’s transport system now accepts BTC
A critical case of QuadrigaCX
Facebook Acquires Chainspace
VanEck adds dozens on new pages to Bitcoin ETP proposal

Jack Dorsey and his love for Bitcoin
Jack Dorsey, the founder of Twitter has again expressed his love and loyalty for Bitcoin while playing a new bitcoin game called “pass the torch” this week. Not just that, in an interview with Joe Rogan, Jack again stated that bitcoin will probably become the native currency of the Internet. He also said that he views Bitcoin as a currency rather than an investment and that he wouldn’t consider holding any other coins, not even Ether.
Argentina’s transport system now accepts BTC
In another boost to BTC use case, the Transportation system which is spread across 37 cities in Argentina now has integrated BTC as one of its payment options. The SUBE card [standing for Sistema Único de Boleto Electrónico] is essentially a credit pass for public transport services within the Buenos Aires metropolitan area and other Argentine cities have added Bitcoin as payment for citizens to pay their transportation expenses
A critical case of QuadrigaCX
QuadrigaCX case just takes some critical twists this week. After having established that Gerald Cotton, the founder of the exchange had passed away in Rajasthan in India and his wife filing the affidavit in Candanian courts, Zerononsense, a research portal has claimed that there are no identifiable cold wallets which are not connected to the internet but can only be opened through private keys only. The report also says the exchange was using user deposits to pay out users withdrawal.
Facebook Acquires Chainspace
In a surprising move this week, Facebook acquired a blockchain start-up Chainspace. The reason sighted behind this acquisition is the hiring of quality blockchain developers who come as part of the package. Chainspace, self-described as a “planetary scale smart contracts platform,” recently posted a note on its website, announcing that the team is “moving on to something new.”
VanEck adds dozens on new pages to Bitcoin ETP proposal
In the latest report coming from regulatory corridors of SEC, VanEck SolidX Bitcoin ETF has added around 30 ‘hardcore’ pages. The very first proposal of VanEck has been submitted to the SEC during June 2018 and has been withdrawn due to Govt shutdown on Jan 23, 2019. With regards to the same Gabor Gubacs of VanEck mentioned that
“There are some changes on it, we have incorporated changes to the proposal based on regulatory feedback and based on feedback from market participants,”
The post Top Trending Cryptocurrency News of The Week: Jack Dorsey, QuadrigaCX, Facebook and VanEck Among Major Newsmakers appeared first on Coingape.
Source: CoinGape

Bitcoin Investor Lost Life Savings When QuadrigaCX Didn’t Issue $422,000 Withdrawal

In a matter of weeks, the demise of QuadrigaCX, once Canada’s largest Bitcoin exchange, has reached the front pages of mainstream media outlets worldwide. Bloomberg, Reuters, and Fox Business are among the mass of notable outlets that have covered this debacle.
While their coverage of this situation has brought things to light that should be known, relatively little attention has been given to those affected, a purported 115,000. Some lost close-to-zero in funds, while others lost their life savings. Bloomberg recently sat down with one Canadian client of the platform, who lives in the same city that the exchange purportedly has headquarters in. His story wasn’t pretty. Please heed his story.
Related Reading: QuadrigaCX Reportedly Didn’t Lose Access to Bitcoin Funds – is it More Than a Mistake?
Vancouver QuadrigaCX User Loses $422,000 After Sale Of Bitcoin
Unfortunately, the QuadrigaCX case hasn’t been without its victims. In the aforementioned interview, victim Tong Zou explained his story. Zou, a thirty-something Canadian software engineer who held a variety of developing stints (BitTorrent, Spiget, Walmart, etc.) in Silicon Valley, moved to Vancouver just months ago in search of something new. As expected, Zou sought to move his savings, then situated in accounts of American financial institutions, which were valued at over $400,000.
While such a move is mandated, especially for so-called “repats” looking to start anew in their own home nation, Zou chose a peculiar route. This was, of course, to purchase Bitcoin on American exchanges, before moving said cryptocurrency holdings over to Canadian exchanges for subsequent liquidation.

Like many newcomers to the Canadian crypto economy, Zou was drawn in by QuadrigaCX, determining that the Vancouver-based exchange was the right platform for him to use. Maybe, he thought that he could visit the exchange’s ‘offices’ if things went south. Anyhow, he deposited his Bitcoin, effectively a majority of his liquid assets, and liquidated the cryptocurrency for $560,000 Canadian dollars.
As Zou needed the money for a deposit on a Vancouver property, he issued a withdrawal request. Yet, Quadriga failed to pay its dues, and left Zou hanging for months on end. He remarked:
“I wasn’t using it for trading — I just wanted to move my money over to my Canadian bank account… What I didn’t know was that my withdrawal would be pending or incomplete and it never got deposited in my bank account. I’ve been waiting four months so far.”
While online hearsay indicates that users receive their withdrawals… eventually, Quadriga’s sudden closure likely put a nail in the coffin for Zou, so to speak.
Zou, who believes that it isn’t curtains closed for the $422,000 that he is owed, is currently coordinating class-action efforts with his fellow victims, who have purportedly turned to Bennet Jones LLP and McInnes Cooper.
This recent harrowing story comes as Elementus, a blockchain research unit, divulged that there’s a chance that QuadrigaCX never held 430,000 Ethereum (ETH) in its supposed “cold storage” wallets. Rumor has it that the company never held $100 million worth of Bitcoin either.
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Did QuadrigaCX Even Have 430,000 Ether in Cold Storage?

The story of the Canadian cryptocurrency exchange CEO who supposedly passed away without disclosing details of how to access the trading venue’s cold storage continues to get deeper the more that emerges about it. Research now suggests that QuadrigaCX never had the amount of Ether claimed in this week’s court hearing.
Several aspects of the story have led the cryptocurrency community to cry foul play – the place of death and the signing of a will just days before the death, for example. However, the latest claims made by researchers appear to be the most damning of all thus far.
Missing Ether: The Plot Continues to Thicken for QuadrigaCX
According to research conducted by blockchain analysis firm Elementus and reported by The Block, there is evidence to suggest that QuadrigaCX had little to no Ether in cold storage. Elementus looked closely at the Ethereum blockchain and transactions associated with the Canadian cryptocurrency exchange to arrive at said conclusion.
At a fully-solvent digital asset exchange, hot wallets are used for deposits and withdrawals, with excess funds being sent to cold storage at a certain threshold for safekeeping. The investigation into QuadrigaCX found that deposits taking the exchange’s hot wallets above the balance needed to operate the trading venue efficiently were not sent to cold storage. Instead, they were sent to other exchange platforms, via two Ethereum addresses:
“0x027beefcbad782faf69fad12dee97ed894c68549”
“0xb6aac3b56ff818496b747ea57fcbe42a9aae6218”
Furthermore, the Ethereum blockchain shows that no ETH was sent from these addresses during the last two weeks – since the announcement of the CEO of QuadrigaCX’s death. However, funds had moved after December 9, 2018 – the date Gerard Cotten is supposed to have passed away, taking with him the exchange’s cold storage data, or so the story goes.
The funds leaving the two addresses quoted above were sent to Binance, Poloniex, Bitfinex, ShapeShift and other large exchanges. These transactions were small but numerous, leading Elementus to conclude that there was an effort being made to keep said transfers from drawing suspicion.
The number of Ether supposedly held by QuadrigaCX was 430,000. However, Elementus believes that the total amount transferred to exchanges exceeds that figure.
Also supporting their claims, Elementus cited the withdrawal issues claimed by many customers before the death of Cotten. This, for the analytics firm, is further evidence that the funds were not in a cold wallet at all. If they had been they would have been used to pay customers requesting funds.
The researchers at Elementus are not the only ones to have suspicions over the legitimacy of the story told in court this week. Taylor Monahan, the CEO and founder of MyCrypto, Tweeted the following on Monday:

2016: 0x0ee4e2d (blue)Biggest outgoing TXs go to:– A Bitfinex Deposit Address #1 (red)– 0x027beef (green)– 0xb6aac (purple) pic.twitter.com/jsPOnIADGI
— Taylor Monahan (@tayvano_) February 4, 2019

She takes an even more speculative view of the operations of the exchange, stating the following:
“… don’t forget that Quadriga ran an exchange with KYC. They have a piles of user’s KYC data. They could turn around and open an exchange account with any of that KYC data to move money. Having fun yet?”
With the evidence of something untoward going on at QuadrigaCX continuing to mount, the eventual court hearing no doubt cannot come fast enough for the customers who have lost out thanks to their own poor security precautions and the seemingly shady business practices of the exchange. NewsBTC will bring you further updates on this story as it develops.
 
Related Reading: No, The Boss of Bitcoin Isn’t Dead, but You Can’t Call Him Either
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QuadrigaCX given Creditor Protection; could seal-up $190 million owed

QuadrigaCX, the Canadian cryptocurrency exchange that has been riddled in legal and financial disputes for several months has now secured creditor protection from the Nova Scotia Supreme Court in the exchange’s recovery of investor funds worth $190 million.
The situation escalated from bad to worse for the exchange and its creditors after the 30-year old founder Gerald Cotten shockingly died due to Crohn’s disease whilst on his trip to India, according to a statement released by the founder’s wife, Jennifer Robertson.
Creditors were sent into a fit a panic because Cotten was “primarily responsible for managing Quadriga and held a significant amount of institutional knowledge regarding the QCX Platform and Quadriga’s business,” as confirmed by an independent third party report.
Just last week, QuadrigaCX’s board of directors issued a statement that there were “significant financial issues,” brewing and hence the operations of the exchange were not optimal. The Nova Scotia Supreme Court also appointed the global audit firm Ernst & Young Inc. to act as an independent third party to supervise creditor protection.
Following the proceedings of February 5, the exchange took down normal proceedings of its website and replaced it with information about the Creditor Protection norms granted to QuadrigaCX.
In the notice issued by the board of directors last week, QuadrigaCX primarily mentioned liquidity issues that required them to source their crypto-reserves held in cold-wallets and for financial institutions to accept their bank draft. However, since the above solutions could not be materialized, the company added:
“Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.”
They further added that:
“What we can tell you is that the CCAA process will allow QuadrigaCX to keep all options open to attempt to maximize the funds available for the company’s stakeholders. We will provide further updates to the extent possible.”
In addition to the above notice, QuadrigaCX also added a list of 12 questions and answers for uninformed customers on the creditor protection norms granted to the exchange.
Justice Michael Wood of the Nova Scotia Supreme Court has given QuadrigaCX a 30-day stay of proceedings in order to prevent the exchange from being hit with any lawsuits. Furthermore, the court filings show that users have a significant amount of claim from the exchange, with the largest one reportedly being around $70 million.
Back in October, the exchange was caught in another legal dispute with the Canadian Imperial Bank of Commerce [CIBC], which it accused of withholding and preventing access of funds worth $21.6 million. Five accounts in total were frozen by the CIBC under the name Costodian Inc, the exchange’s payment partner, citing discrepancies regarding the identity of the users.
The post QuadrigaCX given Creditor Protection; could seal-up $190 million owed appeared first on AMBCrypto.
Source: AMB Crypto

CEO of Crypto Exchange Quadriga Filed Will 12 Days Before his Death

The CEO and founder of the Canadian crypto exchange QuadrigaCX reportedly signed his last will and testament just days before his death. Gerard Cotten passed away in December last year in India and apparently neglected to leave copies of the exchange platform’s cold-storage access, leaving the company and its customers out of pocket.
The beneficiary of Cotten’s estate is named in the document as his wife, Jennifer Robertson. She stands to inherit properties, high-end vehicles, and a pair of pet chihuahuas but claims to have no clue where information relating to Quadriga’s cold-storage solution could be.
Crypto Community Continues to Scream “Exit Scam” Over Quadriga Debacle
The case of the death of QuadrigaCX’s CEO continues to get deeper the more emerges about it. The latest revelation, reported by Bloomberg, is that the late Gerard Cotten filed his will just days before he passed away in India last year.
The document was signed on November 27, 2018. It states that the CEO’s wife, Jennifer Robertson, would receive all his assets following his death. Cotten then passed away on December 9, less than two weeks after he had made arrangements for his estate.
The official cause of death stated by Robertson and the J.A. Snow Funeral Home in Halifax was Crohn’s disease. Further complicating matters is the fact that Cotten is believed to have died in Jaipur, India, in an area reportedly known for “Fake Death Certificate Mafias”.
The fact that Cotten passed away with apparently the only access to Quadriga’s cold storage has caused many in the cryptocurrency community to presume the worst. Thanks in part to the $145 million in lost crypto assets and the suspicious circumstances surrounding the death, many are now crying foul play.

Spoiler alert – The guy didn't die. He exit scammed. #quadrigacx @Telegraph #btc pic.twitter.com/zJxecd1UlP
— ACDMBitcoinEssex (@acdmbe) February 6, 2019

Some have even gone as far as to state that there exists no obituary from the funeral home mentioned:

That pill is way too big to swallow. Does Gerald take us all for fools? @QuadrigaCoinEx #QuadrigaCX
— Brett (@Thinkofwhy) February 6, 2019

Quadriga Customers Plan Lawsuits Over Missing Crypto
According to reports, Quadriga owes customers just over US$53 million of the $145 million trapped in cold storage. Some customers who are out of pocket are now pursuing their own legal action against the exchange. Amongst them is software engineer Xitong Zou, believed to be the largest loser amongst those impacted, having lost out on over US$424,000. This figure has been taken from an affidavit filed in Halifax yesterday.
Those affected by the loss of cold storage access have reportedly formed a committee and are seeking the guidance of law firm Bennett Jones LLP and McInnes Cooper with their legal representation. However, they will have to wait for 30 days since Nova Scotia Supreme Court Justice Michael Wood granted month long stay yesterday, halting any legal proceedings against the exchange for the time being.
NewsBTC will bring you more on this fascinating story as it continues to develop.
 
Related Reading: Canadian Crypto Exchange Has Lost Access to its Cold Storage
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CEO Who Held $150M in Crypto Died in a Region Known for Having a Fake Death Mafia

Elizabeth Greenwood was traveling the Philippines back in 2013 while her rental car crashed into another vehicle in Manila. According to many spectators, the American traveler had suffered grave injuries. The doctors at the local hospital declared her dead. The local Manila authority issued her death certificate.
The story later served as a backbone to the book ‘Playing Dead: A Journey Through the World of Death Fraud,’ written by the same person who was pronounced dead, the Elizabeth Greenwood. In reality, the author was investigating the Philippines fake death mafia. In an interview to the Telegraph, she admitted that the idea arrived in her when she was fancying how it would be to circumvent her massive student debt.
Greenwood’s research found that people wanting to run away from debts or personal responsibilities have gone to the lengths of faking their deaths. There is a whole industry ready with their “death kits,” in which people can hire doctors, administrators, and witnesses for as little as $100. Philippines and India are among the most sought-after countries to get a ‘fake real death certificate’ easily.
So when the head of a crypto exchange decided to take a philanthropic trip to one of these countries and later died under mysterious circumstances with the keys of millions of dollars worth of crypto, people are finding it difficult to digest the story. QuadrigaCX, the exchange, is facing accusations of lying about their CEO Gerald Cotton’s death to orchestrate what people believe is an exit scam from Day One.
Fake Death Certificate Mafia in India
Investigative journalists in India uncovered many cases where people attempted to dupe families, loan sharks, and insurance companies. Times of India, one of the leading newspapers in the country, revealed a gang in Mumbai was issuing all kinds of fake certificates, be it death, marriage, birth – anything. In another incident that mocked the Indian authorities, some miscreants issued death certificates of politicians using a government website.

Indian authorities have taken an active stand to mitigate such issues. In some cases, municipals have outsourced the job of issuing death certificates online to local IT giants. However, the services haven’t reached to a majority of Indian municipals.
Jaipur, the city in which Cotton died, is a small town compared to metropolitans like New Delhi and Mumbai. One can receive a death certificate only by submitting an application form, challan receipt, and Aadhar Card. In the case of Cotton, his family must have submitted his passport documents instead of an Aadhaar Card.
Atop that, Indian medical industry is also facing allegations of corruption on various accounts. A forensic lab doctor in Goa, for instance, was running a private clinic that released fake birth and death documents.

Community Reaction over Quadriga CEO Death
The crypto community believes that the whole episode is turning into a fiasco. There is no news coverage about Cotten’s death in India despite the involvement of $190 million. Redditor TOYAKE wrote:
“Cotton is having financial troubles at his company, so he travels to India to work on an orphanage? While suffering from Crohn’s he decided to go to India? Gets married and sets up a will within a month of his “death.” Manages to set up a plan ($100k) for his two dogs so that they’re taken care of. Doesn’t think to make sure the nearly $200m his exchange watches is also taken care of.”
Jesse Powell, the CEO of Kraken exchange, also wrote:
“We have thousands of wallet addresses known to belong to QuadrigaCoinEx and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys.”
QuadrigaCX meanwhile has reached court for bankruptcy protection. The Canadian exchange confirmed that it was working on resolving the liquidity issues against the mounting crypto withdrawal requests.
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets,” read QuadrigaCX’s homepage.
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Lawyers May Sell Canada’s Biggest Bitcoin Exchange QuadrigaCX to Compensate Crypto Victims

CoinSpeaker

Lawyers May Sell Canada’s Biggest Bitcoin Exchange QuadrigaCX to Compensate Crypto Victims

After the death of QuadrigaCX CEO, $150 million of users’ funds became inaccessible. The exchange will probably be sold to pay the debts.

Lawyers May Sell Canada’s Biggest Bitcoin Exchange QuadrigaCX to Compensate Crypto Victims

Continue reading at Coinspeaker
Source: CoinSpeaker

QuadrigaCX Reportedly Didn’t Lose Access to Bitcoin Funds – is it More Than a Mistake?

QuadrigaCX, a Canadian cryptocurrency exchange, is in serious trouble – its customers cannot access $150 million worth of crypto funds after the owner and CEO, Gerald Cotton, died of Crohn disease in Jaipur, India. He was the only individual who had access to the”cold wallet reserves.”
The exchange reached out to Nova Scotia Supreme Court while seeking creditors’ protection.
However, many analysts now believe that QuadrigaCX could be nothing but a well-orchestrated exit scam. The shift in opinion comes after independent investigators claimed that the exchange was deceptive about having bitcoin cold wallets at the first place.
Research: QuadrigaCX Pitted Traders against Each Other
Researchers at Zerononcense identified bitcoin wallets allegedly associated with QuadrigaCX after collecting pieces of evidence from the exchange’s former customers. Researchers were able to trail bitcoin trades – from verified customers’ accounts to those owned by QuadrigaCX. In the report, Zerononcense listed 31 of these bitcoin wallet addresses.

The publishing site @Medium has removed @ProofofResearch's important work on Quadrigacx without explanation. It's now on his own blog, which is censorship-resistant. Please circulate. https://t.co/IMZYQl85BQ cc @davidgerard
— (((Frances Coppola))) (@Frances_Coppola) February 5, 2019

Furthermore, the researchers found that QuadrigaCX used highly deterministic wallets to manage client funds. These wallets would enable the exchange to generate millions of unique bitcoin wallet addresses from a single, original clustered wallet address. Zerononcense claimed that it had recognized one of such grouped addresses with the help of WalletExplorer.com, a service which is supposedly good at “address clustering.”
The researchers further verified that each of the 31 addresses as mentioned above had deposited funds into the clustered address at some point in time. The overall customer deposit information revealed that “none of the withdrawal addresses provided by customers led to a wallet that could be considered anything comparable to a ‘reserve’ wallet.”
Zerononcense provided some sample withdrawal transaction ids that interlinked customers’ wallet addresses. The researchers found cluster wallets that were granting the customers’ withdrawal requests were waiting from deposits from other customers’ wallets. In some cases, the Quadriga cluster wallets had received funds from the portfolios of other crypto exchanges.
Therefore, it is likely that Quadriga was pitting traders’ positions against each other to fulfill deposit/withdrawal requests.
“QuadrigaCX did not have a designated hot or cold wallet to send the customer their funds,” wrote Zerononcense. “In specific, they were forced to aggregate funds from disparate, disorganized locations in order to ensure that the withdrawal was successful.”
Ethereum Cold Wallets Missing Too
Separate research shared by My Crypto CEO and Founder Taylor Monahan revealed a similar case for Ethereum. She shared QuadrigaCX’s three ether wallet addresses. Two of these wallets made huge withdrawals to addresses associated with other top exchanges such as BitFinex, ShapeShift, and Poloneix. Between 2015 and 2017, Quadriga had made withdrawal worth approx $22 million, adjusted according to ETH/USD rate change.

tl;dr: I'm seeing NO indication of Quadriga ever having cold / reserve wallets for ETH.
— Taylor Monahan (@tayvano_) February 5, 2019

“Oh, and just in case you weren’t shaking your head enough, don’t forget that Quadriga ran an exchange with KYC,” added Monahan. “They have a pile of user’s KYC data. They could turn around and open an exchange account with any of that KYC data to move money.”
Whether it is more than an unfortunate mistake of the exchange to grant the CEO full control over user funds or not can only be confirmed after an official investigation is confirmed.
Until then, no details of the investigation can be definitively proven.
The post QuadrigaCX Reportedly Didn’t Lose Access to Bitcoin Funds – is it More Than a Mistake? appeared first on NewsBTC.
Source: New feedNewsBTC.com

QuadrigaCX: No identifiable Bitcoin [BTC] cold wallet reserves are being held by exchange, claims researcher

In what would constitute a plot twist, a noted cryptocurrency researcher has suggested that there are no identifiable cryptocurrency reserves, whether Bitcoin [BTC] or otherwise, available for QuadrigaCX. The research, posted by Crypto Medication through a post on Medium, also makes a few other findings which if true, would have the potential to rock the cryptocurrency market.
QuadrigaCX, once Canada’s largest cryptocurrency exchange, has been in the news lately after it claimed that it had lost access to $150 million worth of cryptocurrencies in a cold wallet reserve after the untimely death of its founder, Gerald Cotten, in India. The exchange had previously been in the news after the Canadian Imperial Bank of Commerce froze the accounts of QuadrigaCX’s payment processor last year.
Crypto Medication has however, implied that the exchange is lying in its court documents and press releases as it never had access to such a huge reserve of cryptocurrencies that included some 26,500 BTC, 20,000 LTC and 430,000 Ethereum, among others. Summed up, the researcher suggests that not only did the exchange never have any access to such a huge pool of reserves, but the exchange is lying when it says that it doesn’t have any access to existing reserves.
Source: Twitter
The researcher claims to have tracked back several dozen wallet addresses from verified deposits and withdrawals initiated by customers and found that none of them sourced to any vast source of Bitcoin owned by QuadrigaCX. Crypto Medication also argued that the exchange’s claim that they have no access to any reserve could be a lie as if this was so, there shouldn’t have been any movement out of QuadrigaCX’s wallet. However, this hasn’t been the case, he has suggested.
Finally, Crypto Medication has through his research, also claimed that the Canadian exchange never had any reserves of their own and were instead, using deposits made by customers to pay those who wished to withdraw.
Despite the implication however, Crypto Medication makes no claim to refute the news of Gerald Cotten’s death.
Crypto Medication’s in-depth analysis of QuadrigaCX’s holdings used the empirical evidence provided by the blockchain to investigate and arrive at the conclusion offered. If found to be true, this would be in line with Kraken’s Jesse Powell’s thoughts on the case. Powell had called the case ‘extremely suspect’ and had even suggested that Canadian authorities investigate.
Source: Twitter
The post QuadrigaCX: No identifiable Bitcoin [BTC] cold wallet reserves are being held by exchange, claims researcher appeared first on AMBCrypto.
Source: AMB Crypto

QuadrigaCX News: Canadian Apex Court Appoints Ernst & Young Inc. to Investigate Into the Lost Funds

The QuadrigaCX in a recent attempt to safeguard itself from the creditors has filed for a stay with the Apex Court.
The Canadian Apex Court has designated February 5th as the date for a preliminary hearing where it will appoint Ernst and Young Inc. to further investigate into the matter.
The widowed wife of the deceased exchange CEO, Gerald Cotten,  reportedly sworn in for the questions. According to sources, the owner of the exchange died on December 9 while traveling abroad.
Some of the exchange have been unable to withdraw their funds on the Quadriga exchange since November. Crypto-influencers’ advice to users and exchanges.

Revelations and Other Details Regarding the Matter
The Canadian users of the exchanging have been raising open tickets and have expressed their concerns on Reddit who have been unable to withdraw their cryptocurrencies or fiat funds from their accounts. The cause of delay in withdrawal was earlier cities as the $19 million funds held up by the court for a different case.
The situation soon escalated when Jennifer Robertson, Cotten’s wife reported of his death. She notified the users and the employees that only minimal funds were kept in the hot storage of Cotten’s wallet and most of the cryptocurrencies stored in his personally maintained cold storage had been lost.
Recently, the Board of Directors with Robertson have applied for an interim stay on the matters of withdrawal from the exchange. The Canadian Apex Court has designated February 5th as the date for a preliminary hearing where it will appoint Ernst and Young Inc. to further investigate into the matter.
What are the Crypto-Influencers saying?
The Twitter and Reddit feeds are flooded with concerns and opinions on the baffling issue.  The crypto-community has taken into the investigation of the matter and startling discoveries, and co-incidences are coming to light. Moreover, as the case rests with the authorities now with an ongoing investigation, there is very little that the others can do apart from safeguarding their assets.

That's sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security.
Also, never have CEO carry private keys. Bad on many levels.
Personally, in good health and intent to live longer and prosper. Thx for asking. Stay #safu. https://t.co/4uPQnXNN2D
— CZ Binance (@cz_binance) February 2, 2019

Most notably, the CEO of Binance, Changpeng Zhao, had tweeted the need for the utilization of muti-signature wallets. He quoted a series of tweets from Meltem Demirors; who is popular crypto-influencer on Twitter. The tweet from Demirors’s advised the users and the exchanges of the steps that they should take to protect their funds in such a situation.
Binance DEX to be Launched “Very Soon”
In the same thread later he confirmed that Binance decentralized exchange would be launched soon. A decentralized exchange would not have centralized storage of cryptocurrencies but would compile, execute and store everything on the blockchain. Numerous decentralized exchanges have been announced in the past year, 2019 should see their widespread use and adoption.

A fast DEX coming very soon.
— CZ Binance (@cz_binance) February 2, 2019

 
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Source: CoinGape