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When it comes to cryptocurrency, things can always get worse.
Earlier this month, news broke that QuadrigaCX, a Canadian cryptocurrency exchange, lost access to $190 million worth of customer crypto after the founder died — taking sole knowledge of the account passwords to the grave.
Now, it looks like it screwed up again. According to a preliminary report filed by Ernst and Young, which is acting as a court-appointed monitor for the company, QuadrigaCX sent a so-called cold storage wallet 103 bitcoin (worth more than $460,000) after it had been locked out.
Essentially, because founder Gerald Cotten died, no one — not QuadrigaCX and not its customers — can retrieve the majority of the crypto held by the exchange. It looks to be lost forever.
This news, it should be noted, became public following a Jan. 31 affidavit filed by Cotten’s widow Jennifer Robertson and published by Coindesk. And yet, despite knowing the company couldn’t access the cold wallets in question, QuadrigaCX still sent them a bunch of bitcoin.
“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access,” reads the report. “The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”
That’s a monumental screw up for a company already reeling from a catastrophic screw up, and a number of the estimated 92,000-plus QuadrigaCX account holders with cash or cryptocurrency balances are taking the exchange to court. Specifically, the Ernst and Young report notes that 427 “affected users” have obtained legal counsel.
Unfortunately for them, at the moment it looks like there isn’t much money to claw back. Only $902,743 worth of cryptocurrency was being held in so-called “hot wallets” — wallets the exchange can still access — as of Feb. 5. That was before over half of that was then “inadvertently” lost by the company.
However, there is one small bit of good news. And we do mean small. Ernst and Young intends to transfer the remaining crypto into a cold wallet that it controls. So, at least in theory, QuadrigaCX can’t slip up again and lose the rest of the money, too.
But hey, we’re sure it’ll find another way to mess things up. When it comes to cryptocurrency and disasters, all you have to do is wait.