Calls for better crypto regulation after millions frozen at B.C. exchange
Gerald Cotten, CEO and founder of QuadrigaCX, a Canadian cryptocurrency exchange platform involved in Bitcoin. PNG
Cryptocurrency experts say a series of events that has locked users of a Vancouver-based currency exchange out of $180 million in digital assets is a wake-up call for Canadian investors and serves as a catalyst for improved regulation.
The mess started when Gerald Cotten, the 30-year-old CEO and sole director of QuadrigaCX, the country’s largest cryptocurrency exchange, died from complications linked to Crohn’s disease while visiting India, according to court documents filed to the Nova Scotia Supreme Court.
Cotten was the only person with access to QuadrigaCX’s locked digital “cold wallets” that hold “very significant cryptocurrency reserves,” according to the company. Meanwhile, Cotten’s wife, Jennifer Robertson, filed an affidavit saying after searching their home in Fall River, N.S., she was unable to find any passwords or business records.
On Tuesday, QuadrigaCX was granted creditor protection and a 30-day stay of proceedings, which prevents any lawsuits from being filed against the company.
Christine Duhaime, a financial crime lawyer, said that while early cryptocurrency adopters were libertarian-types who wanted to move money without government oversight, the meteoric rise of Bitcoin brought into the crypto market regular everyday people who may only now be learning about the lack of regulation over the crypto market.
“I think they assumed that because our financial-services sector is so sound, and it is, that this was sound, too. And I think most Canadians would be shocked to know that there’s no r ...