Dec 9th last year marked a rough time for QuadrigaCX when the CEO of the crypto exchange- Gerald Cotten passed away. His demise made the exchange to face a daunting challenge as it was not able to access a total of 190 million dollars of its own funds. In January this year, Cotten’s wife presented an affidavit that the crypto exchange has no access to its wallets. Because Gerald Cotten has not left any passwords. QuadrigaCX CEO, Gerald’S death affected 115,000 users of the exchange. Authorities are trying to work their way around the situation.
According to the reports, recently a govt. leader claimed that the funds of the crypto exchange would not have got stuck this way had the exchange been based in Bermuda. According to Fortune, the leader of the island nation of Bermuda- Premier David Burt said,
“If Quadriga was licensed under the Bermuda Monetary Authority, what has happened would not have been able to happen, because we have rules regarding the custody of master keys and making sure they’re not held by a particular individual. […] It basically states what you have to do with the master keys, how those things have to be handled and making sure that they cannot be lost, or if they are lost, there is a way for that recovery to happen.”
Bermuda offers an act that safeguards such cases from such troubling times. The act is called- ‘Bermuda’s Digital Asset Business Act 2018.’ The act was passed last year to boost fintechs and businesses that are based on cryptocurrency in order to build shops in Bermuda. Around seventy-four fintech companies have been permitted to incorporate there. These fintech companies include the subsidiary from Binance which is compliance focused crypto exchange based in Hong Kong. Also, in the past seven days, the Bermuda regulators have approved the island’s first crypto exchange- Omega Dark.
Any company that wishes to establish in Bermuda is, of course, welcomed, but it has to go through some strict tests in order to safeguard themselves from issues that crypto exchanges such as QuadrigaCX are facing currently. Further, the Premier explained that they do recognize that there can be “reputational damage” due to threats such as scams. This also affects the “traditional financial services sector.” Since the Premier does not want that, Burt said- “I would call it, cross-contamination”, as per the reports obtained.