Why you shouldn't keep crypto on exchanges

For those who keep their crypto stored on exchanges, here's another example of why you shouldn't...


QuadrigaCX, Canada's largest cryptcurrency exchange, claims they can't access their cold storage wallets after the death of their founder a couple of weeks ago and has filed for bankruptcy protection.

• Canadian Cryptocurrency Exchange QuadrigaCX Files for Creditor Protection in Nova Scotia (Cointelegraph)
  
• Crypto Exchange QuadrigaCX Claims They Cant Find Their Wallets (CCN)
  

Quote:In October 2018, the exchange disputed a $19.6 million sum with the Canadian Imperial Bank of Commerce (CIBC). Per Canadian news daily the Globe and Mail, QuadrigaCX had been experiencing difficulties accessing $16.3 million of its funds since January, when the CIBC froze five accounts belonging to Jose Reyes, the exchanges owner, and its payment processor, Costodian Inc.

CIBC subsequently requested that the Ontario Superior Court withhold the funds and determine whether they belong to Costodian, the exchange, or the users who deposited the funds. The court ruled in favor of the bank, stating that the owner of the funds was not clearly established. CIBC was then obliged to pass the funds over to the Accountant of the Superior Court in order to identify the owner.

Further complicating the exchanges situation is the apparent death of its founder, Gerry Cotten. Following an announcement of Cottens passing, some users asked for proof of death, while one even posited the theory that the exchange could not access the assets in cold storage, as the keys were only known to Cotten.

Users of the platform have reportedly been unable to access or withdraw their funds for months. Some speculated whether the platform had gone insolvent earlier this week when QuadrigaCX appeared to be down for maintenance. One commenter posted on Reddit, ?They will declare insolvency due to an inability to find a suitable bank to host an account and facilitate transfers.

Posted on the QuadrigaCX site now:




I lost about 500 bucks, could be worse.

Either way, if your crypto is stored on an exchange, you do not own or control the wallet.