Kraken, the San Francisco-based cryptocurrency exchange, is offering to help the controversy-riddled Vancouver-based QuadrigaCX, with a reward of $100,000 to anyone who provides information that can lead to the discovery of the Canadian exchange’s missing funds. Additionally, this information would be passed on to law enforcement agencies.
Announced via an official blog post on February 28, Kraken stated that an entire industry was affected when a single cryptocurrency exchange ceased their operations, locking up their user’s funds. Kraken likened the situation to that of the Tokyo-based Mt. Gox. The Japanese exchange, which was once the largest Bitcoin [BTC] exchange in the world, but is now bankrupt and defunct. Kraken further added:
“Since 2014 we have invested significant resources and lent our crypto expertise to the Mt. Gox trustee and investigators, supporting the return of as much client funds as possible and as soon as possible.”
Kraken’s intent behind the announcement was stated to be,
“Kraken wants to bring awareness and attention to this case, in hopes that we can help discover some or all of the missing client funds.”
In December 2018, QuadrigaCX’s founder, Gerald Cotten, passed away while on a trip to India and since then, the company’s operations are in limbo. The exchange suspended operations on January 26 and announced that it lost control of their cold wallets, where most of their assets were kept as Cotten was the only one that knew its location.
The cold wallets, according to some estimates, are valued at $190 million and belong to as many as 115,000 clients.
QuadrigaCX mysteriously went offline towards the end of January, citing maintenance issues, which were further amended by the board to state “significant financial issues.” A Canadian court even appointed the global audit giant Ernst & Young Inc. as an independent third party to supervise the creditor protection protocol.
Kraken hopes that its new announcement will bring to light information very similar to the one unearthed by an old podcast that was in the news recently. In the 2014 “True Bromance,” podcast, Cotten revealed that information may be stored on paper in a safety deposit box. He added,
“Essentially, we [QuadrigaCX] 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.”
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