QuadrigaCx Update: CEO Stored Private Keys on Paper

The founder and CEO of the major Canadian crypto exchange QuadrigaCx, Gerald Cotten may have stored the private keys on paper in a security box published in a report on 15 Feb.

In an interview “True Bromance Podcast” in February 2014 Cotten warned about the danger of losing private keys and no access to the funds stored on those wallets. Cotten added that the U.S government with the biggest computers are unable to retrieve the funds. It is impossible to retrieve the funds if you lose the private keys.

Cotten explained that the best way to secure the private keys is to print them onto a paper and store it into a security box. The only way to access your funds is to steal the deposit box from the bank vault and access your private keys.

QuadrigaCx CEO said that the exchange team stored the private keys offline in the company’s security box at the bank. Cotten explained: 

“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.”

Earlier this month QuadrigaCx reports that the exchange has lost access to the funds stored in cold wallets after the death of the CEO. The exchange reports that Cotten is solely responsible for the private keys of the cold wallets. Reports show that the exchange has no access to $260 million CAD. 

Yesterday, Nova Scotia Supreme Court Justice Michael Wood delayed the decision on legal representation of QuadrigaCx exchange saying that he will issue a decision in writing within this week.

Reports show that QuadrigaCx accidentally sent $500k funds to the cold wallets that the company has no access.