Crypto Exchange Says It Can’t Repay $190 Million to Clients After Founder Dies With Only Password

Oh, god, I’m dyin’. The cryptocurrency people are funny. I understand why Jordan Peterson and Dave Rubin are using it, but apart from free speech, there seems to just be an all-consuming preoccupation with secrecy and it doesn’t look good. It’s no good when the national security apparatus doubles down on secrecy for the sake of protecting their own turf, and its no good when there’s a product just begging you to let it help you do dirt on the down low. But, hey, this is just one guy talkin’, here. Here’s the article:

Canadian crypto exchange QuadrigaCX says it cannot repay most of $190 million in client holdings after its 30-year-old founder Gerald Cotten, the only person who knew the passwords to its “cold storage,” unexpectedly died in India in December 2018, Coindesk reported on Friday.

In a sworn affidavit with the Nova Scotia Supreme Court, widow Jennifer Robertson said that QuadrigaCX owes its customers some $190 million in both cryptocurrency and fiat money. QuadrigaCX has filed for creditor protection because it says it cannot access the funds stored in “cold storage,” just the comparatively smaller amount in a “hot wallet” used for transfers, CoinDesk wrote:

The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million, according to the affidavit.

It was not clear what portion of the exchange’s crypto holding were kept in cold storage, versus its hot wallet. In the affidavit, Robertson explained that “only a minimal amount of coins” were stored in the hot wallet, but specifics were not provided.

Robertson also said that Cotten held “sole responsibility for handling the funds and coins” and no other members of the team could access the stored funds. QuadrigaCX announced Cotten’s death in mid-January, saying he had died “due to complications with Crohn’s disease on December 9, 2018 while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need.”

While Robertson has Cotten’s laptop in her possession, CoinDesk wrote, she says she does not know the password, and a technical expert recruited by the firm has been unable to bypass its encryption. She also says Cotten left behind no business records.

Some other reporting has suggested it is possible some of the funds in question moved after the case was publicized, and though the evidence was not definitive, it and the strange circumstances of Cotten’s death spurred accusations that his demise was either faked or the pretext for an exit scam by other parties with access to the holdings, according to CCN. However, Robertson included a death certificate in the filings, CoinDesk wrote.

According to CBC, the government confirmed a Canadian had died in India, but could not offer more details due to privacy laws.

As CBC noted, the Canadian Imperial Bank of Commerce froze $26 millions worth of QuadrigaCX’s assets in January 2018 “after finding irregularities with payment processing,” and a document from the Ontario Superior Court of Justice in 2018 concluded that “$67-million worth of transactions ended up improperly transferred into the personal account of Costodian Inc, the payment processor.” The issue was resolved, though according to CoinDesk, QuadrigaCX says the legal fight as well as ongoing issues with payment processors has “severely compromised” their ability to access tens of millions of dollars’ worth of holdings held by the processors.

A 2017 Wall Street Journal article noted that unlike stock exchanges, which only facilitate transactions, crypto exchanges are uniquely vulnerable because they store cryptocurrencies for their customers. However, typically the threats associated with this practice are hackers and other cybercriminals, rather than lost passwords.

In the filings, Robertson wrote that the exchange “urgently needs a stay of proceedings which will allow Quadriga and its contractors additional time to find whatever stores of cryptocurrency may be available and also to negotiate the bank drafts available to Quadriga,” CoinDesk wrote.

“This is a tough lesson learned,” Calgary customer Elvis Cavalic told CBC, adding that he had been unable to withdraw $15,000 in holdings in October 2018.

“I would probably avoid [cryptocurrency] in the future,” Cavalic said. “They’ve left us completely in the dark. I’m kind of preparing for the worst.”

Above article courtesy of Gizmodo:

Of course it’s a witch hunt, but it’s also more than that.

What is a witch hunt, anyway? Why do they happen? There is an excellent teaching course on this subject named The Terror of History, produced by Teofilo Ruiz, I think. In the course, Ruiz outlines the social, cultural, and political moments in Western history which led to witch trials, and they appear to accompany times of change and the anxiety and insecurity that come with such change. Long story short, it’s the strategy of an ingroup to turn on some outgroup to blame for what they perceive as a world falling apart, as the social order undergoes change that displaces the relative dominance of that ingroup.

I think that we have in Donald Trump a man who was groomed to play America’s foil, and who was surrounded by a very colorful team of foils, and they are all playing the social and political role of witches for an entrenched political and media class (is there really a difference?) and the professional classes more broadly. The slow and steady parade of names and the perpetually-breathless annunciations of the imminent downfall of Trump, have been going on for years without the media ever looking up to re-assess first premises. I think it is organic enough to be plausibly denied as a project by national security/secret society people, since it only takes a few people to actually be blown in, and a few others could grasp it and play along without ever having been given a script.

But why? Why would they do it? Well, because you don’t remain dominant in information space by sitting around, waiting for clever, bad actors to blind-side you with narratives you didn’t see coming. No, what you do is invent the threats and generate drama that catches up would-be conspirators (by nature) in an irresistible, and mostly-manufactured intrigue. I think the whole Donald Trump Presidency was always going to be theater of a Reality TV nature, and everyone knows it, so the trick, as it always is in politics, is to center the lie elsewhere. Politicians lie, but on multiple levels, and it is their professional skill to out-lie other players who are also lying on one or more levels, such as their own constituents. Same/same, here.

Black Panther is coming back to theaters in honor of Black History Month?

I’m not even black and I rankle at the gall of Disney, here. There is no history in Black Panther. Not a drop. Wakanda is not real. I don’t think black folks are actually confused about that, but apparently Disney is hoping they are confused on this. The cottage industries that pop up around identity are parasites, and the folks at Disney looked at them and said to themselves, “We need to get some of those Susceptible to Pandering dollars.”

I’m vaguely a Jordan Peterson fan, but…

I’ve been hoping without hope that Peterson would wind down his bizarre mischaracterizations of “Postmodernism”. It just IS the case that the early Enlightenment project began with the rational turning away from the Church as absolute arbiter of truth but also turning toward Science as a better source of absolute truth. A few hundred years later, we know a lot more, and one of the failed ideas that we’ve had to abandon is absolute truth, in particular when it comes to the bigger, arguably more important questions. There is no objective moral truth, and I can say that despite never having been a Marxist. I’m not a closet Communist, and it is actually bearing false witness to apply that fundamental attribution of motivation to me, and I am no unicorn.

I can say there is no objective moral truth in the world because look around you – you are not alone in really, really wanting to believe there is such a thing, and no one even has any idea how to propose to begin measuring it (don’t even say the Australian sophist’s name). Nothing. There is no morality detector except a subjective human judgment. That just is the case. It doesn’t bother me at all, because admitting it doesn’t change anything. Nothing changes at all. Everything that was true before is still true, only we have less justification for use of force or coercion than we’d like to admit, and that is because we are pitifully insecure. It just is the case, and it is self-evident. That’s what we lose when we admit the truth. Power over others. Undue power over others, and a plausible shared narrative to cover it.

It is the case that there is truth in the world, but scientific truth is always provisional, and ontological commitments are only ever political, and extraneous to proximate truth. We know there is no objective morality, and that our condition is deeply subjective, and thus how we appraise our shared future together and how much we intend to respect one another and ourselves in the face of the truth of our condition is necessarily going to lead to disagreement. Jordan, consciously or otherwise, is dog-whistling that it may become necessary to deny this condition in favor of a “better truth” that just happens to be his own. That, I am here to tell you, is not how this is going to go.

Jordan has also made some statements to the tune of “truth is what I can get away with”, which is, I am sure, not how he would frame it, but close enough. He can’t have it both ways, unless he means to say that he and his political allies intend to agree to pretend there is an objective morality, even if they know better, as long as they think they can get away with it. Surely he doesn’t mean that. But he might. That seems to be the logical consequence of his declarative.

Because face it, things have life spans and novelty is increasing in the world, along with the human population. Multiplicity of opinion is not optional. Indeed, we need to be actively developing social mechanisms for increasing our tolerance of actual intellectual diversity, because it is coming. And yes, that means changes are coming, and I am not going to need a “thought leader”, which is another problem I have with Peterson and his kind, generally, when they become activists. The moment they enter that ecosystem, they’re participating in the marketplace of neurosis and fear-mongering or problem-solution peddlers. An economic and social role-enhancing opportunity comes their way and the carny barker in them pops out. The primary programming thing, again.

Oh, by the way, here is a related criticism:

Finally, let me add that Jordan Peterson is a legitimate hero, and I am in violent agreement with many things that he has said, in particular I am resonant with his position on the freedom of speech vis a vis compelled speech. I remain grateful, above all, to Dr. Peterson for sticking his neck out, but look, his efforts have led to good fortune, and good on him. My rebuke is still sincere.

You know, it may be the case that civil war in the United States is inevitable.

I am astonished by how few Americans seem to understand the philosophical and historical trajectory that Western Civilization has been on, at large, and how it is not an error than needs amending, or an academic bias of some kind.

Let me shorthand it for you. Science and Individualism. We are going to have them both, and we’re not fucking skimping on the Individualism part. I don’t know of any other issue that would enlist me in such a war but this one. We’re not going to be China. We’re not going to suppress Individualism, and we are not going to harm individual sovereignty.

You are the highest authority on what is right or wrong, good or bad, beautiful or ugly. Truly let that sink in and, if you have any imagination or character, it may also be terrifying to contemplate the horrible consequences. To wit, you have to grant such authority to others, as well, and not use some mythical, objective moral leaderboard to track the relative righteousness of people, according to your own fears and moral disgusts. You own them. You keep them. This is how it is going to be.

Intellectual autonomy and freedom of speech are non-negotiable, get-shot-in-the-face-for-it terms for living peacefully with one another moving forward. Hope you all are cool with that, because that’s what you’re getting. Even your ideology of no prejudice (with which I agree) is still just another ideology. We agree intersubjectively, but our shared moral bias is still merely subjective. And our agreement is merely political. It will never be the case that there is an objective morality to which you just happen to be subscribed. The law won’t agree (except for “Hate Crime”, which is an abomination), and a romp through the history of Western Civilization won’t bear it out, either. The last time we subscribed to an objective morality, and its corresponding moral leaderboard, it was the Church and they were still burning people at the stake. No prince owns me, and the State is not my parent. There is no higher moral authority than me for me, and there isn’t one higher for you than you.

If you are an American, get hip to these facts. Online offerings from the likes of Yale, UCLA or MIT and more are abundant, and authoritative sources. Use them.

“Truth is what your friends let you get away with”

That’s attributed to the late Richard Rorty, an American philosopher of note from the mid-20th Century. He thought about the nature of truth a lot, and this quote is more than merely pithy, although it is that, too.

It’s not going to be good enough, anymore, depending on our friends to tell us what we can get away with. That is because, as the social psychologist Jonathan Haidt puts it, when we ask whether our own favored ideas are true, what we are really asking is may I still believe them? Is there any plausible line of reasoning that will allow me to hold on to my belief? Likewise, when asking whether a claim that another person has made is true, if we don’t want it to be true, then must I accept it as true? In other words, we don’t typically actually have a taste for actual proximate truth so much as we’d like to believe about ourselves, and the reason we have a blind spot about it is because we evolved to deceive ourselves, first. We don’t want to know the truth, and we don’t want to know that we don’t want to know the truth. It’s not an easy thing to get people to pay attention to, to say the least. Especially when we have evolved to not attend to it, specifically.

People have primary programming, and we only ever pretend that our social and professional roles are more than means through which to pursue that primary programming. We have little bits of narrative that we use to cover this, from legal impact, economic impact, but mostly for psycho-social and personal political reasons. When we say, for example, “All doctors go to medical school to help people,” that is a bald-faced lie. It might feel wrong to acknowledge it, or in such binary terms, but it is the case, nevertheless, and those feelings, themselves are what I am pointing to, as well as their propriety. What about the propriety of making such a facile and patently untrue declarative? That’s not okay, for me.

And how do these little white lies operate? They help us to tell a story about doctors, in this example, and one of many, many, completely untrue and evidentially-unsupportable hypotheses and notions that protect us from the truth, which is the thing we pay through the nose to be rid of, isn’t it? In this case, in fact students choose medicine because they think they can hack it and that the sacrifice will be rewarded with lucre and elevated social prestige. If pressed, we’d admit yes, of course, this is merely rational, and so it is.

But there is a little part of the monkey mind that believes in magic, and there is hocus pocus in the stories we tell ourselves about our healers, but also our law enforcement, state bureaucracies, and politicians, and our military, as well. Doctors are there because they want to help us. Cops are out there on the streets just to keep us safe. Joining the professional military doesn’t automatically make you government property, which can be used in the course of national security/defense, as defined for any experiment or purpose at all. Politicians are servants who sacrifice of themselves to represent your best interest in the halls of power. You getting the pattern, here? We tell these little lies, my friend, because we are insecure and cowardly, but it isn’t our fault. We are born this way.

And yet. We are also born shitting ourselves quite naturally, and yet we somehow find a way to overcome this naturalness in favor of good hygiene. Okay, we actually overcome it through the power of shame. Seems like we could attend to our natural proclivity to hide from unwanted awareness, and always go along to get along, and never truly exercise any executive judgment or understand ourselves at all. Seems like we could decide to stop using euphemisms, and pointedly so. To unblinkingly correct a peer when they say something that, apart from social currency, is a crock of shit. Seems like we could demand a higher level of cognitive hygiene, at the expense of the rather bourgeois and self-aggrandizing skills of flattery and social grace. And we will, but you know, first they ignore, then they laugh, then fight, then lose, and resent you forever.

Those of us who already live this way live outside of the protective bubbles of corporations that have HR departments. Those who live inside those bubbles are forced, through fear of political reprisal, to conform to intellectual solidarity. The only thing worth fighting for is your freedom, and your freedom is your executive judgment, period. You are the final authority in the whole world over what is good and bad, right or wrong, beautiful or ugly. No one else on the planet has any more authority than you over what you believe about those things. You may just to defer to “what ever my peers believe” or what have you, but you had to do the deferring, since it is you who is the authority over yourself. That’s the truth that the HR department and the political bubble desperately needs you to forget. Those who live inside those corporate bubbles traded their freedom for money and/or status within their peer group. Just like Winston did in 1984, all they way up until he didn’t. No one wants the truth, and no one wants their freedom. And no one wants to know they don’t want the truth and don’t want their freedom. It’s a hard sell.

NPR and its base are full of shit.

I heard one of those clips of a listener-patron who needs folks to know they have contributed, and then listened to them wax sycophantic; gushing about how NPR has no bias whatsoever in their coverage of the news or anything else, for that matter. Now, I am a house painter who is also an active autodidact, and I happen to know that you cannot graduate from a school of journalism without having learned about the inevitability of bias in reporting and editing. No journalist who is competent in their own professional domain knowledge will ever claim that their reporting has no bias in it, unless they are dishonest. So, to then choose this falsehood and select it for on-air circulation, again, is either a function of incompetence or dishonesty. Take your pick. It doesn’t really matter, since either way it looks bad. (I’m using journalism and reporting interchangeably, here.)

The point is that the truth is nothing to be afraid of. I would respect NPR more if its representative outlets reflected a more diverse intellectual environment. They want to have it both ways. Realpolitik says it is the case that the NPR base would pull the plug on their ass if they failed to tow the Party line. This is political realism. This is psychological realism. If NPR or any other purveyor of opinion or news wants me to respect them as “expert” or “honest”, then they start by acknowledging it all up front and wrestling through the implications openly. To the degree they could never comply, I could never be the person for whom their news is crafted. They may be “national”, but they don’t represent me and aren’t talking to me.


As one who, walking in the twilight gloom,
  Hears round about him voices as it darkens,
And seeing not the forms from which they come,
  Pauses from time to time, and turns and hearkens; 

So walking here in twilight, O my friends!
  I hear your voices, softened by the distance,
And pause, and turn to listen, as each sends
  His words of friendship, comfort, and assistance. 

If any thought of mine, or sung or told,
  Has ever given delight or consolation,
Ye have repaid me back a thousand-fold,
  By every friendly sign and salutation. 

Thanks for the sympathies that ye have shown!
  Thanks for each kindly word, each silent token,
That teaches me, when seeming most alone,
  Friends are around us, though no word be spoken. 

Kind messages, that pass from land to land;
  Kind letters, that betray the heart’s deep history,
In which we feel the pressure of a hand,–
  One touch of fire,–and all the rest is mystery! 

The pleasant books, that silently among
  Our household treasures take familiar places,
And are to us as if a living tongue
  Spice from the printed leaves or pictured faces! 

Perhaps on earth I never shall behold,
  With eye of sense, your outward form and semblance;
Therefore to me ye never will grow old,
  But live forever young in my remembrance!

Never grow old, nor change, nor pass away!
   Your gentle voices will flow on forever,
When life grows bare and tarnished with decay,
  As through a leafless landscape flows a river. 

Not chance of birth or place has made us friends,
  Being oftentimes of different tongues and nations,
But the endeavor for the selfsame ends,
  With the same hopes, and fears, and aspirations. 

Therefore I hope to join your seaside walk,
  Saddened, and mostly silent, with emotion;
Not interrupting with intrusive talk
  The grand, majestic symphonies of ocean. 

Therefore I hope, as no unwelcome guest,
  At your warm fireside, when the lamps are lighted,
To have my place reserved among the rest,
  Nor stand as one unsought and uninvited!

Henry Wadsworth Longfellow