Canadian crypto-exchange in big trouble after founder reported dead in India

(February 5)_Gerald Cotten, founder of large Canadian crypto exchange QuadrigaCX is reported to have died in India back in December. Since then the company has been in deep trouble as Cotten did not leave information on how to access cryptocurrencies held in storage.

The Wallets

A recent article notes: "Any user who wants to transfer bitcoin requires a wallet — located on a server. So-called hot wallets are for live transactions — while so-called cold wallets are for storage to keep coins safe from hackers. Robertson's affidavit says that assets tallied in those wallets show that Quadriga owes clients approximately $250-million as of Dec. 17, 2018. But court documents say the company can only access "hot" wallets at this time."

Jennifer Robertson is Cohen's widow and executor of his estate. Robertson has said she has hired a security expert to aid her recover information about Quadriga Fintech Solutions Corp. and several other companies Cotten registered in BC. She claimed that Cotten's companies had more than 115 thousand clients who had invested more than $70 million. She estimates they are now worth about $250 million in December 2018.

Nova Scotia court issues a stay of proceedings

The Nova Scotia Supreme Court has granted QuadrigaCX an order for credit protection after the reported sudden death of founder Gerald Cohen in India. Cohen was just 30 years old. His death was said to be due to complications of Crohn's disease. The 30-day stay is a bid to stop lawsuits against the company at this point. The hope is that the key to the wallet will be found.

Maurice Chiasson, the company's lawyer, told the court he wanted time to search for about $250 million Canadian in assets that has been inaccessible since his death. The death of Cohen has left about 115,000 users without access to their funds. Court filings indicate that some users have large balances with the largest affected user's balance valued at almost $70 million. Understandably, some users are in panic mode.

QuadrigaCX employees say the only way to access much of the cash was lost when Cotten died. This is rather strange. Usually there is some arrangement such as is described on the appended video in which several people have the keys and at least two of them need to sign on at the same time. This allows for access when someone is not available and also serves as a check against one individual getting access without the other knowing. The appended video argues that Cohen is probably not dead and that there is a scam involved with him transferring coins out of the wallet. Cotten apparently was the only person with the recovery code to access the secure "cold wallets". However, as the video pointed out Cohen had said in an earlier interview that there was a three person arrangement with two being needed to open the wallet.

Access to the cold wallet

Quadriga customer Elvis Cavalic said to CBC: "With a cold storage wallet, it's completely offline. It's not connected to the servers or the infrastructure set up by the exchange. It's usually a physical device that you would plug into a computer and requires a button to be pressed and it might need a password."

Apparently the way to access that wallet was not left with his wife Jennifer. It is passing strange why Cohen would not leave this information with others or that others do not have they keys with several being required to sign in at the same time to the device. He surely should have been aware of the problems should he die or be incapacitated.

Nikhilesh De, a CoinDesk reporter, said that money in the cold wallet could be gone forever if no one can find the key saying: "The idea behind cold storage is that they're inaccessible unless you have the appropriate keys and the access and coins have been lost in the past. There will only be a finite number of bitcoins ever issued, and any bitcoins that are lost are lost forever."

The coins could be lost forever too if Cotten is still alive and is able to withdraw the coins without detection.

Cotten's encrypted laptop will be handed over to lawyers acting for the creditors. Eventually it will be given to a court-appointed monitor. A Nova Scotia RCMP spokesperson confirmed to the CBC that they are assisting an investigation into QuadrigaCX that is being led by the RCMP of Toronto West. Lawyers for the company say that they are considering a possible sale of the company to cover their debts. Given that a considerable amount of their assets cannot be accessed no company might be interesting in buying it.

Previously  published in Digital Jouirnal

Canada not only supports Venezuela coup but helped plan it

Canada has not only supported the US recognition of Juan Guaido the Venezuelan opposition leader in the National Assembly as president but also was involved in planning that preceded the coup.

 

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Canada and the Lima Group

Next Monday February 4th Canada will host members of the Lima group of South and Central American countries in an attempt to find a resolution to the situation in Venezuela Canadian Foreign Affairs Minister Chrystia Freeland has announced.

Freeland said: "Since August 2017, Canada has been working closely as a member of the Lima group, which is comprised of over a dozen Latin American countries and the Caribbean, to address the Venezuelan crisis. The Maduro regime relinquished any remaining legitimacy when it seized power through fraudulent and undemocratic elections on May 20, 2018. We now call upon Nicolas Maduro to cede power to the National Assembly, the only remaining democratically elected institution in Venezuela, in line with that country's constitution."

The May 20, 2018 elections Freeland is referring to was the election of Maduro as president. While numerous countries rejected the results there were also many who accepted it. Two divergent accounts of the election are linked, one in Wikipedia, the other in Venezuelanalysis

Not only does Freeland not identify the election she just categorically calls them undemocratic and fraudulent. Of course she does not tell you either that the functions of the National Assembly have long been taken over by the elected Constituent Assembly. Mainstream media do not ever mention this body. See my recent Digital Journal article.

Friedland has already spoken with Juan Guaido two weeks before the US and Canada recognition of him as president. She congratulated him on unifying opposition forces. Her conversations allowed Canada to respond almost immediately after Guaido declared himself interim president according to an official who spoke to the Globe and Mail.

Ben Rowswell, Canada's former ambassador to Venezuela said that he was astonished by the Lima Group consensus that quickly followed Guaido's declaration that he was president. Bowswell said:"It’s an unusual move for any country to comment on who the president of another country should be – to have countries that represent two-thirds of the population of Latin America do it in minutes shows there was a remarkable alignment that’s got to be nearly unprecedented in the history of Latin America. What you might be seeing here is success of some extraordinary quiet diplomacy.”

The quiet diplomacy that planned the coup

An AP article notes: "The coalition of Latin American governments that joined the U.S. in quickly recognizing Juan Guaido as Venezuela’s interim president came together over weeks of secret diplomacy that included whispered messages to activists under constant surveillance and a high-risk foreign trip by the opposition leader challenging President Nicolas Maduro for power, those involved in the talks said."

In mid-December Guaido went to Washington, Columbia and Brazil to brief them on the mass demonstrations planned to coincide with Maduro's swearing in on January 10. However, the article also notes: "Playing a key role behind the scenes was Lima Group member Canada, whose Foreign Minister Chrystia Freeland spoke to Guaido the night before Maduro’s swearing-in ceremony to offer her government’s support should he confront the socialist leader, the Canadian official said."

Now Canada is carrying on with its task by hosting the Lima Group without the US. The US need not be present while Canada is doing its job for it and the US is not a member of the Lima Group.

I append a pro-Maduro video and then a Fox News anti-Maduro video. The latter is interesting in that Bolton who is interviewed specifically says that the US is interested in Venezuelan oil.

Previously published in Digital Journal