Speculation that the missing private wallet keys for the QuadrigaCX exchange may be in a safety deposit box is riding high after an old podcast with CEO Gerry Cotten surfaces.

The ongoing saga of the Canadian cryptocurrency exchange, QuadrigaCX, is utterly fascinating. Just when you think all the facts have been relayed in the case, something new and bizarre pops up. Over 100,000 users of the platform lost access to $145 million in cryptocurrencies due to the death of Gerry Cotten, the CEO of the exchange, as he was apparently the only one with the private keys for the cold storage wallets. Yet new hope emerges as an old podcast suggests that he may have stored the keys in a bank safety deposit box as well.

The Crazy Circumstances of QuadrigaCX

In early December 2018, Gerry Cotten was in India to help open an orphanage. While there, he died due to complications from Crohn’s disease. The QuadrigaCX CEO was only 30 years old and was survived by his wife.

His death ushered in a sea of chaos for the exchange as he was the only person who had the private keys for the exchange’s cold storage wallets. His laptop supposedly contains the information, but it is encrypted and investigators have not been able to fully bypass the encryption.

After Cotten died, the exchange filed for protection from class action lawsuits in order to give them time to, hopefully, gain access to the keys. The judge in the case, Nova Scotia Supreme Court Judge Michael Wood, has delayed his decision on any creditor representation until later this week. The court’s protective order does end on March 7th.

What makes this whole situation mysterious is that the exchange literally had no plan for an emergency that would allow any other employee to have access to the cold storage wallets. One would think that a man with serious health issues would have made some sort of provision for this, not to mention that any exchange should be expected to have some safeguards in place in case of the death of any senior management.

Compounding the issue is that a fair amount of Ethereum (ETH) was moved from the exchange up to a full month after Cotten’s death. It could be that such transactions were scheduled in advance, but it has caused some to question if Cotten is actually dead or not. Another wrinkle is that Cotten wrote out his last will and testament a mere twelve days before his death. Again, you would think he would have made sure his widow at least had access to the keys to keep the exchange operating. In addition, the exchange has refused to divulge any public keys so that the contents in the wallets could be verified.

Cause for Hope?

However, there may be some hope in people being able to regain access to their coins. Bloomberg is reporting that Cotten appeared on a podcast called “True Bromance Podcast” back in 2014 where he discussed cryptocurrencies and exchanges with the podcast’s hosts.

Cotten talked about the danger of losing keys to the Bitcoin wallets, saying:

It’s like burning cash in a way. 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.

However, he had a solution – printing out the keys and storing them in a safety deposit box. He went on to say:

The paper wallet is a great way to store your Bitcoins. Basically, all you need to send Bitcoins is your private key, which is a string of, a ton of numbers and letters. The best way to do it is take your private key, print it off, store it offline in your safety deposit box, vault, whatever, and then take the public key, which is your address, and use that to send money to it. So that way you can never have your Bitcoin stolen, unless someone, like, breaks into the bank, steals your safety deposit box and gets into your private key and so forth.

Cotten then tells the host that QuadrigaCX did exactly that, printing out the keys and storing them in a bank’s safety deposit box. He goes on to explain:

At QuadrigaCX, we’re obviously holding a bunch of Bitcoins that belong to other people who have put them onto our exchange. So what we do is we actually store them offline in paper wallets, in our bank’s vault in a safety deposit box because that’s the best way to keep the coins secure. 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.

So the entire QuadrigaCX saga has taken another turn. Are the keys still stored in such a manner? If so, did he leave a paper trail so that the exchange (and his widow) could find them? Hopefully for the users of the platform, such a storage system was still being used by Cotten and will eventually be found.

Do you think the keys are still stored in a safety deposit box? Is this a colossal scam? Let us know in the comments below.

Images courtesy of Pixabay and Flickr/@Stuart Connor.