- Bullish vs Bearish - 5%5%
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A few weeks ago, Canada’s largest crypto exchange lost around $190 Million worth of crypto immediately after the death of the CEO. The story was that the founder and CEO was the only one with keys to the exchanges’ wallets and after his death, noone had access to the exchanges’ wallets.
According to some, the funds in these wallets are seemingly on the move. For example, a Reddit user, known as Palhello claimed that some of the wallets that are connected with the exchange’s hot wallets started transactions as soon as the news of the CEO death were made public.
He not only shared the details of his research, shared screenshots of the addresses, but also claimed that the wallets in question were used by the exchange in the past. According to some other users, it is not possible for wallets to initiate transactions from exchanges hot wallets without approval from QuadrigaCX.
However, this is still speculation as it is still not definite that the four wallets are actually cold wallets. There is a fair chance that these are some hot wallets that are not owned by the company, but some of their big clients.
The matter is right now under police investigation, so we have to wait for the police statement over the issue to drive a conclusion if they are hot wallets or cold wallets. This case has brought on a lot of skepticism from several industry experts and illustrates why crypto is still too risky for most institutional investors.
According to Peter Todd, who is a US-based cryptography consultant, the rumors about QuadrigaCX exit scam is only speculation for now. He claimed that there is a legitimate possibility that company employees or the founder’s family is involved.
Similarly, CEO of one of the most well-known crypto-exchanges in North America Kraken, Jesse Powell, claims that this is difficult to believe that the company lost the keys for the cold wallets after CEO’s death.
What It All Means For Crypto Prices
Whether or not the keys are actually lost or the Canadian exchange is running an exist scam remains to be seen. Until there is a due diligence process and strict set of guidelines that crypto exchanges are governed by, crypto as an asset class remains an extremely speculative and risky investment option.
An argument can be made that in cases such as these, world wide regulations that govern the conduct and place strict requirements for crypto exchanges to operate within are necessary to prevent investor losses and provide the public with safe environment to exchange this emerging asset class.
Until there are insured custodians which guarantee capital safety in case of security breaches or outright scams, institutions nor the public will have much belief in crypto as a legitimate asset class.