Biggest Loser Help! ...How A Coin Exchange Went South

Quadriga is an old Latin word for a chariot pulled by four horses. It's a charming notion. I imagine Apollo pulling the sun across the sky in a golden chariot. But all that glitters isn't gold and the same is true for coin exchanges.

There's a learning curve when it comes to investing and trading coins in the cryptocurrency market , in fact, another ancient Latin phrase is operative—caveat emptor—let the buyer beware.

After the Bitcoin boom between October 2017 and March 2018, I felt pretty good about myself and my trades on the market. I'm a Canadian and primarily used blocktrades and Quadriga, a large Canadian coin exchange. All of my transfers went off without a hitch and I wasn't a big investor by any means, although I made a tidy sum in those heady days of bullish frenzy.

But trading and investing in coins is not caviar for the general and there are some hard lessons to be learned. Many people poured money into various crypto coins figuring the boom would go on...silly people. Already there were signs it wouldn't. Some of my friends were predicting a $50.00 USD figure for Steem. Dream on, dreamers!

Bitcoin led the way driving up the price of every cryptocurrency but it was artificially propped up by speculators. The people who thought happy days were here again kept buying and buying and buying. Well, that's a hard lesson to learn. But there were other hard knocks as well. As Dylan says, look out kid—you're gonna get hit. I did.

I kept on using Quadriga for all my transactions because it never let me down--not once--until it finally did. I clicked on the site one day to transfer some funds and saw this notice:

January 31, 2019

Dear Customers,

An application for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was filed today in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers. The Court is being asked at a preliminary hearing on Tuesday February 5 to appoint a monitor, Ernst & Young Inc., as an independent third party to oversee these proceedings.

For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.

Apparently Gerald Cotten, the CEO and founder had died in December while in India and took with him to the grave all the keys to the wallets. He was so paranoid about getting hacked that he transferred his funds from hot wallets to cold storage and never shared with anyone the access to his keys.

Quadriga kept on doing business accepting automatic deposits and manual transfers from people like me. The irony is QuadrigaCX previously claimed to be using a multi-signature system which would have prevented such a disaster.

It seems the golden chariot drawn by four steeds that are the glittering promise of this coin exchange are in reality the four horses of the Apocalypse. Now I'm left wondering if I'll recover part or any of my funds. Ironically, CoinDesk recently confirmed that the funds Quadriga accepted even after knowledge of this problem came from automatic deposits, although manual deposits were also accepted from at least one user. Well, I guess that would be me, lol.

Anyway, I now need an exchange that will convert bitcoin into CDN and deposit it in my Canadian bank. Any suggestions? I'm open for business :)

© 2019, John J Geddes. All rights reserved

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