Sometimes what you read makes your eyes pop out of your head. And, no, it isn’t the salacious gossip about Justin Bieber and his new wife Hailey. Listen, what’s got our attention and momentarily made us look up from the pit is this report from CNN Business:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]A crypto exchange may have lost $145 million after its CEO suddenly died[/perfectpullquote]
Now we know crypto is the wild, Wild West of finance where anything goes. Until the marshal arrives and cleans up the town. That one individual has managed to take $145 million of crypto dollars to his grave makes us gape. Jaw open. Eyes staring. This wondrous individual is the late (we’ll get on to whether this is the case or not, of course) Gerard Cotton, CEO and co-founder of Canada’s biggest cryptocurrency exchange, Quadriga.
What’s happened and continues to unfold and keep us shaking our head in total disbelief is like a Dan Brown novel except, unlike in the Da Vinci Code, there’s no apparent solution to the plot, however badly contrived. It’s a cliff-hanger. It’s so preposterous that the sense of disbelief can be cut with the proverbial butter knife.
GC, a potentially terminally sick man, was (or still is, if you believe the Dan Brown’s of this world) the only one to have the passcodes to the cold wallets where loads and loads—about $145 million at the current value—of mugs’ (sorry, that should be customers’, a slight typo on our part; our bad) cryptocurrency was kept. About 92,000 users in fact, give or take a few. Who would have thought that there were that many puckheads in Canada? Last time we were in Toronto, we certainly didn’t see that many around. It just goes to show, doesn’t it? Perhaps living in the frozen north does things to the brain. But there you have it.
And why can’t those nice Canucks not get their digital receipts? We read this:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Quadriga, Canada’s biggest cryptocurrency exchange, said it’s unable to gain access to $145 million of bitcoin and other digital assets after Gerald Cotten, its 30-year old CEO and co-founder, died of complications arising from Crohn’s Disease while traveling in India. Many of the digital currencies held by Quadriga are stored offline in accounts known as “cold wallets,” a way of protecting them from hackers. Cotten is the only person with access to the wallets, according to the company. Cotten’s widow, Jennifer Robertson, said that the laptop that Cotten used to run the currency exchange is encrypted, according to a copy of her affidavit posted online by cryptocurrency news site CoinDesk. “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.” [/perfectpullquote]
So let’s try and get our head around what’s been going on. Just be sure to defrost yours before we start. GC was the only one to have access to that ultra-secure cold wallet (a cold wallet is not some wintery Canadian weather but a way of holding cryptocurrency away from the prying eyes of the internet) which we’re told (to more eye-rolling disbelief here) was a laptop. A laptop? A laptop worth $145 million and $200. Yep. That $200 is the hardware value plus op software. We’re not told whether it’s Apple or Microsoft. We deserve to know! But we digress.
GC with a potentially fatal disease, so we’re informed, jets off to open an orphanage in India. By the way, it’s Crohn’s. Now yours truly ever so keen to dig down into the depths of the truth by googling a few facts discovers that Crohn’s (a condition our BIL has, by the way) is not generally considered to be a fatal disease. Ah-ha, the conspiracy theorist out there are beginning to smell a rat. And that story about the wife? Who would believe it? Who would indeed?
There’s the fact that GC changed his will a couple of weeks before his disappearance from the scene. Just like in one of those Hollywood film noirs. We’re really finding it hard here to keep up with these eye-popping revelations. That’s what you do when you want to favour someone. It’s either the wife (the grieving widow) or the Chihuahaus who inherit. Ha, ha, ha.
It further comes to pass that this cryptocurrency exchange exists more in the imagination of GC and those 92 thousand or so frostbacks. There don’t appear to be any business records (Ops!) or the passwords that might allow access to the $200 laptop and all those riches (Expletive deleted). Jennifer his widow doesn’t have them and a quick search through the wastepaper basket didn’t turn up much. Nor were hackers successful at getting in. This despite all those claims to the contrary at the NSA!
What also drives those conspiracy theorists out there, and the kind of people who’ll entrust their lifesavings to a cryptocurrency managed by someone called Gerald without even the faintest hint of any due diligence, is the fact that the company’s was in trouble at the time of GC’s untimely death. That and the fact said demise took place whilst he was in India opening an orphanage. India. A big place India. Easy to get lost in, we’re told.
One can’t make this stuff up, really. Yours truly dabbles in fiction as a by-line to working in the pit, but any reader with any sense of decency would throw away a book with this story in it in total disgust. It’s as if one’s collated a whole bunch of Dan Brown clichés and passed them off as fiction. Unbelievable.
Of perhaps more interest to the man in the street and readers at Continental Telegraph is: What were the regulatory authorities doing? Ah! We read it all took place in British Columbia. That’s the home of the Vancouver Stock Exchange. A place known for its probity and quality assurance. This is the same organisation that has just so-so recently experienced this, as reported by the Vancouver Courier:
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Investigation: Vancouver’s Bridgemark stock scandal rocks B.C. capital markets
A Glacier Media investigation reveals widespread alleged exploitation of investors on the Canadian Securities Exchange and TSX Venture Exchange. Those alleged of defrauding investors include former City of North Vancouver manager Kenneth Tollstam.
That’s just the latest in a whole series of financial scandals and frauds. They have form in BC, the Wild West of Canadian finance. It’s hardly surprising that Quadriga set up shop there. There’s a regulatory commission for sure, but they’re like the marshal. Hunting down outlaws? They’re only there to count the dead bodies.
Think BC, think wild Ursalia.
You’ve been warned.