Wednesday, September 18, 2019

Late QuadrigaCX’s CEO Podcast Reveals Private Keys Were Printed on Paper and Stored in Vaults

While efforts are still being made to recover the C$190 million which is inaccessible to QuadrigaCX’s exchange, there may be a ray of hope. A podcast from 2014 which was discovered, reveals that the late Gerald Cotten, QuadrigaCX’s CEO used to store the private keys to cold wallets on a paper, reports Bloomberg.

Private Keys are Stored on Paper Wallets as Backup

According to the media, Gerald Cotten in an interview, “True Bromance Podcast” in 2014, stated that the private keys used to access the exchange’s offline wallet are stored on paper. The paper is then left with the Bank in a safe deposit box. As a result, even if the keys are lost, access to the wallet is not permanently lost.

Cotten had also outlined that losing access to a bitcoin wallet is equivalent to burning cash. In his opinion, even the U.S. government with the most sophisticated computers in the world would be unable to gain access to such wallets if the keys are lost. Therefore, it is impossible to retrieve the funds held within the storage.

Gerry Cotten also said:

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 fort

A Ray of Hope to Retrieving Lost Private Keys

Although the details of the late CEO’s former podcast is not a certainty that the same method of storage was used before he died on December 9, 2018, one can still hope that it is. If that is the case, then it will mean that the inaccessible C$190 million which the exchange claims are held in cold wallets may be accessible. All that it will take is to locate the bank(s) whose vault was used to store the paper wallet.

Related Article:  Court Appoints Legal Counsel for Customers in Case Against QuadrigaCX Cryptocurrency Exchange

Asides from the late CEO’s method of storage, reports reveal that Gemini, a U.S. based virtual currency exchange owned by the Winklevoss twins also employs the same method. In 2017, the twins, Tyler and Cameron revealed that they also store private keys to their exchange’s cryptocurrency wallet on paper.

Also, the paper is cut into pieces and packaged into envelopes. Each envelope is then sent to a different bank for storage, and it ensures that even if one bank is attacked, only part of the key will be found thereby making such attempts futile. Of late, the process has been enhanced with the use of multiple signatures from cryptographically sealed devices before such wallets can be accessed.

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