According to a recent report, Gerald Cotten, the founder of QuadrigaCX may have kept the company’s private keys on paper in a safety deposit box.
QuadrigaCX Dead CEO, Cotten Warned
Cotten had previously warned of the risk related to the loss of keys to cold wallet storage systems, therefore, losing access to the assets stored on them. He said:
“Even the U.S.government, with the biggest computers in the world, could not retrieve those coins if you’ve lost the private key. It’s impossible to retrieve those,”
Furthermore, he revealed that the best way to store the chain of numbers and letters which is referred to as private keys is to print them out and keep them in a safety deposit box. While explaining this, he added that:
“So that way you can never have your Bitcoin (BTC) stolen, unless someone, like, breaks into the bank, steals your safety deposit box and gets into your private key and so forth,”
Also, Cotten said that the team behind QuadrigaCX stored it’s private keys offline in a safety deposit box which belongs to the exchange at a bank.
“Essentially we put a bunch of paper wallets into the safety deposit box, remember the addresses of them. So we just send money to them, we don’t need to go back to the bank every time we want to put money into it. We just send money from our Bitcoin app directly to those paper wallets, and keep it safe that way.” He continued.
The Exchange is in Trouble
However, the exchange has been unable to get through to its cold wallets in which most of its assets are kept because the founder died suddenly in the early part of December and he was the only one in charge of wallets and corresponding keys. The company reportedly has CA$375,000 ($286,000) in cash while it has to pay up a sum of CA$260 million ($198,435,000) to its clients.
Moreover, due to the threat of becoming insolvent, it has now sought creditor protection in a Canadian court.