A securities regulator has announced it is now looking into QuadrigaCX, the Canadian exchange that lost access to 250 million Canadian dollars worth of investor assets after the founder died.
The Ontario Securities Commission told Reuters: “Given the potential harm to Ontario investors, we are looking into this matter and have already been in contact with the monitor.”
The British Columbia Securities Commission, the province’s securities regulator, previously said it does not regulate QuadrigaCX.
Gerald Cotten, the founder of QuadrigaCX, died as a result of complications arising from Crohn’s disease in India in December. He is believed to have been the only person with access to the encrypted keys.
Daniel Wolfe, CEO of Tradingene, a marketplace for trading algorithms, said the QuadrigaCX affair is a cautionary tale for the entire crypto community.
He said: “Exchanges need to ensure that there are always at least two people with access to the passwords.
“For larger institutions, a larger number should have access under certain circumstances.
“There should be policies and procedures to ensure that passwords are always kept in a way that does not rely on a single individual.
“This information should be provided to investors. Investors should ensure that they have an understanding of the risks on each exchange.”
Among the 115,000 clients affected is Vancouver resident Tong Zou, 30, who lost 560,000 Canadian dollars.
He told Bloomberg: “It’s all my savings, so I’m just living on what little I have left and trying to start over.”
Tong, who is between jobs, added: “I wasn’t using it for trading – I just wanted to move my money over to my Canadian bank account.
“I was going to use that money for a deposit on an apartment, but now I can’t do that anymore.”
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Disclaimer: We do not give advice on financial products.