Canadian Crypto Exchange QuadrigaCX lost access to over $190 Million in Crypto Funds!
Crypto Exchange QuadrigaCX Loses Private Keys to Cold Storage after the death of its funder Gerry Cotten on December 9, 2018.
The Canadian Crypto Exchange QuadrigaCX lost access to over $190 Million in Crypto Funds as Gerry Cotten, the founder, was the only person holding the private keys giving access to the crypto funds for QuadrigaCX…
Canadian Bitcoin exchange QuadrigaCX announces on its website that it has lost the Private Keys to its Cold Wallets. If the keys are still untraceable, investors can write off their deposited in BTC.
The case shows once more: Those who want to be secure, take responsibility for your own keys.
The Bitcoin failure only goes as far as the willingness of investors to take responsibility for their own crypto investments.
Comfort in Bitcoin Space – the older crypto holders are likely to have fond memories of the Mt.Gox case – is all too often punished.
Check out the Cryptopia Hack story also: https://bitcoincryptoadvice.com/cryptopia-exchange-hacked
Even in decentralized systems, there are scenarios in which individual actors or institutions can bring about the loss of Bitcoin units through mismanagement. So they do exist, the single points of failure.
Crypto-exchanges are a good example of this.
Reports of total loss of deposits on exchanges are piling up; usually hackers are responsible.
The tragedy: If it comes to the loss of Bitcoins, you can usually say goodbye to your coins.
What counts as a promise of value, can mercilessly reverse: The loss of the private keys is the loss of the associated assets.
Own your Bitcoin!
The motto “not your keys, not your bitcoin” has once again gained in importance in the case of the Canadian Exchange QuadrigaCX: the crypto exchange has lost access to its cold storage.
As the board of the Bitcoin exchange announces on their website, the company has been facing liquidity problems for quite some time:
“Over the last few weeks, we’ve worked hard to resolve our liquidity issues, including trying to locate and secure our crypto reserves in the cold wallets […]. Unfortunately, these efforts have not been successful.”
In the concrete process, this case should be unique.
After all, the company apparently tried to use best practice: Crypto funds were stored in cold storage.
But very stupid if you can not get hold of the associated cryptographic keys as the funder was the only person holding the keys for millions of dollars in crypto assets!
After he died, his wife tried to find some password but his computer was encrypted so no way to get hold of the private keys…
Private keys define ownership in the crypto world!
Private keys ultimately define the ownership of Bitcoin beyond doubt.
Anyone who deposits BTC on an exchange can not strictly speak of “ownership”.
The private keys remain with the crypto exchanges until investors withdraw them and – on their own responsibility – manage them.
So, don’t leave your cryptocurrencies on an exchange if you don’t need to.
Store your Bitcoins and Alt coins on a private crypto wallet like the new Ledger Nano X: Click Here !