Category Archives: Cryptocurrency
Welcome to my complete beginners guide to What is Cryptocurrency. The short and easy answer to the title question is that cryptocurrency is decentralized digital money. But what exactly does that mean and how does it work? In this guide, I will answer all the questions you have about cryptocurrency. Im going to tell you when it was invented, how it works and why its going to be so important in the future. By the end of this guide, youll be able to answer the question, what is cryptocurrency? for yourself. The world of cryptocurrency moves fast so theres no time to waste. Lets get started! When I hear a new word, I look up its definition in my dictionary. Cryptocurrency is a new word for most people so lets write a crypto definitionHow Does Cryptocurrency Work? Crypto Definition Below is a list of six things that every cryptocurrency must be in order for it to be called a cryptocurrency;
7 Tricky Ways How to Get Bitcoins: 2019 Ultimate Bitcoin Video Guide
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INTERESTING FACT In 2010, a programmer bought two pizzas for 10,000 BTC in one of the first real-world bitcoin transactions. Today, 10,000 BTC is equal to roughly $38.1 million a big price to pay for satisfying hunger pangs.
INTERESTING FACT Ethereum has quickly skyrocketed in value since its introduction in 2015, and it is now the 2nd most valuable cryptocurrency by market cap.Its increased in value by 2,226% in just last year a huge boon for early investors.
INTERESTING FACT You can trade online with crypto exchanges like Binance, Bitstamp and Coinbase. You can also arrange to trade cryptocurrencies in-person with peer-to-peer sites like LocalBitcoins.com
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What is Cryptocurrency: Cryptocurrency Explained the Easy Way
No matter where you are based in the world, learning how to trade cryptocurrency can be a daunting task for any newcomer this anxiety is exacerbated by the notorious volatility of the crypto markets.
Before you begin trading cryptocurrency in the UK, you should always do your research. Without prior knowledge, you are liable to make countless mistakes.
In this guide, we discuss how to trade cryptocurrency in the UK.
UK residents have more options when it comes to trading cryptocurrency than US residents.
This is because the Securities and Exchange Commission (SEC) in the USA has been fighting hard for regulation, prompting many exchanges to ban US residents from their services.
Famously, crypto analyst Tone Vays had his BitMEX account terminated on the suspicion that he was a US citizen. UK residents, however, can freely trade on BitMEX at their leisure.
The first point to note about crypto trading is that unlike traditional stock markets, the crypto market is open 24/7.
You must then decide which type of trading you believe will suit you best and which exchange platform is right for you.
Which exchange you choose will largely depend on what type of trading you wish to conduct. You can find our definitive guide to cryptocurrency exchanges here, which includes a list of some of the most popular exchanges and what to look out for.
Spot trading and margin trading are the two most common types of trading, with the exception of over-the-counter (OTC) trading.
Spot trading involves buying or selling an asset with the aim of turning an instant profit.
This might involve selling a certain amount of an asset you already own and then trading with two other assets. The trading will be done on speculation, so you might choose to split your funds equally or go all in on one you feel most confident about.
It is then your hope that you will turn a profit on these assets before selling them and re-buying your original asset, thereby having more of the original asset than you began with.
Margin trading is different because you can trade with leverage. Leverage is borrowed money from an exchange. The amount of leverage on offer to you will differ depending on the platform you are using.
Using leverage means you can generate higher profits because you are staking more funds. If your trade is successful, the exchange will then reclaim the leverage and leave you with the profits.
If the market moves against you, you will be liquidated. This means your original deposit is lost however, you will not have to pay the leverage back. You can learn more about the risks of spot and margin trading here.
OTC trading involves buying or selling an asset directly with no middleman. Fundamentally, this can be as simple as a friend selling you 20 worth of Bitcoin.
OTC trading offers benefits that exchanges do not in that you do not need to provide as much personal information. However, it does come with its own inherent risks, as does any method of crypto trading. You can read our guide on OTC trading here.
LocalBitcoins.com is a popular peer-to-peer (P2P) OTC marketplace where users can facilitate trades with one another.
Once you have identified the type of trading most suitable to you, it is time to learn when to enter the market. Learning about key terms, trade patterns, and previous market cycles will help you make the most informed decision about when you should buy in.
The most important thing to remember is that trading is done on speculation nobody has a concrete idea of how the market will move.
Firstly, you will need to know if you want to go long or short. Going long is when you believe an assets price will rise, while going short is when you believe an assets price will drop.
Of course, you could also just buy some crypto when prices are low and hold on to it for as long as you want before selling when prices are higher.
Learning about support, resistance, and moving averages will help you understand key levels for when to enter or exit the market.
The same is true for studying graphs showing an assets trading history if you notice a pattern re-emerging, then you might be on to something.
You can also do a quick Google search for trading patterns that will bring up illustrations of patterns which also give an indication of what might happen next in the market, such as a falling wedge or Bart Simpson pattern.
When picking an exchange, it is best to read the terms and conditions. While this might seem tedious, you can never be too careful when it comes to crypto trading, even in the UK.
The crypto market is notoriously volatile and can go in any direction at any given point. On this basis, it is wise to conduct your own research because we do not recommend any crypto, exchange, or service in particular, and ultimately you are responsible for any decisions you undertake.
Hopefully this guide has helped you understand how to start trading cryptocurrency in the UK.
You can discover more about the top five tools to master crypto trading, CFD trading, and arbitrage with our guides.
Interested in reading more trading-related guides? Discover more about bid, ask, and bid/ask spread prices with our guide.
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How to trade cryptocurrency in the UK - finance.yahoo.com
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Cryptocurrency Prices, Charts, and Market Cap Data - UNHASHED # NAME PRICE MARKET CAP VOLUME (24H) CHANGE (24H) CHANGE (7D) PRICE GRAPH (7D) 1 Bitcoin $4,099.70 $72,233,327,854 $9,183,441,376 +0.21% +1.85% 2 Ethereum $141.24 $14,895,148,854 $4,708,168,534 -0.98% +2.65% 3 XRP $0.30865 $12,872,688,408 $808,043,456 -0.79% -0.78% 4 EOS $4.11 $3,726,548,653 $1,872,987,217 -2.81% +12.30% 5 Litecoin $60.40 $3,691,942,471 $1,672,631,260 -0.59% -0.52% 6 Bitcoin Cash $167.87 $2,971,535,613 $561,726,828 -0.81% +1.49% 7 Binance Coin $17.03 $2,404,639,611 $185,315,030 +4.68% +12.81% 8 Stellar $0.10697 $2,057,962,756 $304,874,897 +0.18% -0.79% 9 Tether $1.00 $2,032,457,816 $8,533,764,084 +0.39% -0.59% 10 Cardano $0.07064 $1,831,547,730 $82,043,746 +0.82% +12.93% 11 TRON $0.02328 $1,552,137,614 $216,952,467 +0.83% -3.29% 12 Bitcoin SV $64.80 $1,145,113,035 $72,088,549 -0.54% -2.96% 13 Monero $53.23 $898,885,155 $87,072,550 -0.40% -1.15% 14 Dash $102.12 $890,319,871 $265,026,483 +5.25% +10.69% 15 IOTA $0.30658 $852,136,948 $9,927,368 -0.44% -1.37% 16 Maker $711.36 $711,358,097 $1,516,656 -1.71% -3.24% 17 Tezos $0.96696 $641,949,040 $4,534,124 +9.93% +36.32% 18 NEO $9.70 $630,649,733 $314,388,505 -1.28% +4.40% 19 Ontology $1.27 $630,211,508 $67,704,600 -0.42% +2.48% 20 Ethereum Classic $4.77 $521,920,235 $155,120,196 -1.17% -1.53% 21 NEM $0.05357 $482,113,800 $13,351,682 -1.59% +4.54% 22 Zcash $57.20 $355,306,031 $137,647,311 +1.76% -0.44% 23 Basic Attention Token $0.27638 $344,955,889 $27,037,830 +3.32% +34.33% 24 VeChain $0.00598 $331,474,034 $13,639,405 +3.03% +2.04% 25 Waves $2.77 $277,434,398 $11,166,896 -1.03% -0.35% 26 OmiseGO $1.87 $262,519,486 $86,513,345 -0.45% +4.75% 27 Qtum $2.76 $247,010,052 $130,443,492 +2.37% +5.14% 28 Dogecoin $0.00208 $246,681,026 $18,489,711 -0.30% +0.51% 29 USD Coin $1.00 $246,239,299 $25,445,566 +0.29% -0.89% 30 Bitcoin Gold $12.94 $225,389,020 $10,177,027 -0.61% -1.45% 31 Maximine Coin $0.13568 $223,736,317 $20,186,503 +0.86% +88.19% 32 Crypto.com Chain $0.04645 $204,034,047 $397,500 +1.24% -29.88% 33 Lisk $1.73 $200,787,171 $7,155,424 +3.43% +14.47% 34 TrueUSD $1.01 $200,406,801 $25,109,209 +0.37% -0.66% 35 Ravencoin $0.06029 $194,043,981 $18,817,284 -1.09% +5.75% 36 Decred $19.38 $185,055,516 $1,636,535 -0.43% +2.77% 37 0x $0.31065 $182,526,070 $16,599,711 -0.41% +15.45% 38 Chainlink $0.49553 $173,434,129 $3,235,797 +0.55% +7.95% 39 Zilliqa $0.01947 $169,619,057 $12,127,502 +1.38% -3.28% 40 Augur $15.16 $166,813,183 $11,207,048 -7.68% -2.64% 41 BitShares $0.05913 $159,906,427 $6,623,773 -3.33% +11.28% 42 ICON $0.33206 $157,200,809 $12,786,766 -0.55% +2.41% 43 Holo $0.00115 $153,542,161 $5,381,956 +0.03% -1.66% 44 KuCoin Shares $1.71 $153,372,491 $4,295,401 +1.26% +52.39% 45 DigiByte $0.01226 $142,346,067 $3,040,819 +0.10% -16.00% 46 Steem $0.44752 $138,451,922 $1,608,217 +2.57% -4.41% 47 Nano $1.03 $136,937,932 $2,140,129 +0.09% +3.65% 48 Bytecoin $0.00073 $134,609,294 $181,619 -1.26% -4.00% 49 Bitcoin Diamond $0.85257 $131,089,033 $1,375,431 +0.04% -0.09% 50 Aeternity $0.50738 $130,035,744 $50,649,521 +4.26% +5.07% 51 BitTorrent $0.00076 $129,504,569 $14,379,020 +0.29% -5.20% 52 Huobi Token $2.50 $124,931,673 $76,815,429 +1.14% +3.33% 53 Komodo $1.10 $123,176,290 $2,298,904 +1.99% +4.06% 54 Paxos Standard Token $1.00 $118,294,972 $56,982,162 +0.40% -0.92% 55 IOST $0.00959 $115,211,734 $19,562,339 -1.79% +9.35% 56 Verge $0.00717 $113,296,088 $5,321,498 +0.78% -4.65% 57 Enjin Coin $0.14660 $112,441,545 $9,848,898 -1.19% -19.88% 58 Pundi X $0.00063 $110,515,970 $1,318,337 +0.93% +2.32% 59 Bytom $0.11020 $110,475,066 $3,504,159 -2.53% -3.30% 60 Siacoin $0.00271 $108,751,912 $1,257,292 +0.07% -0.62% 61 Stratis $0.95971 $95,270,439 $1,432,815 -0.82% +5.56% 62 THETA $0.10720 $93,318,133 $2,985,659 -2.20% -9.57% 63 Dai $0.97698 $86,403,061 $28,012,803 +0.85% -0.96% 64 Status $0.02471 $85,764,098 $13,133,396 -2.84% +7.48% 65 Aurora $0.01298 $84,910,079 $2,150,195 -1.97% -16.94% 66 Golem $0.08809 $84,886,145 $1,628,236 -1.66% +12.37% 67 Project Pai $0.05751 $83,496,840 $5,453,586 +5.81% -1.45% 68 Populous $1.50 $80,067,011 $3,653,964 +0.85% +4.25% 69 Ardor $0.07968 $79,599,177 $1,220,063 +3.35% +13.18% 70 Insight Chain $0.22171 $77,577,521 $3,184,122 +0.30% -0.04% 71 ABBC Coin $0.16339 $74,749,828 $39,855,411 -9.88% -10.89% 72 Ark $0.67898 $74,217,265 $1,416,578 +3.49% +8.35% 73 Mixin $153.18 $67,141,374 $806,644 -3.15% +5.41% 74 Factom $7.09 $66,760,102 $98,563 +1.96% +14.40% 75 GXChain $1.11 $66,749,758 $12,058,516 -1.82% +3.29% 76 Cryptonex $1.17 $65,013,347 $7,912,463 -0.33% +1.97% 77 Waltonchain $1.58 $64,965,219 $7,073,561 +7.03% +25.44% 78 REPO $0.58978 $64,851,042 $28,158 +35.29% -3.93% 79 Digitex Futures $0.08640 $63,717,461 $821,882 +3.42% +20.71% 80 Revain $0.12962 $62,793,770 $789,208 +0.28% -7.88% 81 Gemini Dollar $1.00 $60,891,403 $4,336,988 +0.08% -0.67% 82 Bibox Token $0.54213 $60,143,078 $17,730,676 +67.98% +85.78% 83 HyperCash $1.37 $59,526,351 $1,025,818 -1.71% -6.35% 84 Decentraland $0.05619 $59,008,316 $17,468,568 -0.48% +10.31% 85 MaidSafeCoin $0.12499 $56,563,569 $139,933 -0.37% -2.84% 86 WAX $0.05908 $55,692,870 $276,628 -1.69% -3.56% 87 Loopring $0.06686 $55,423,002 $3,733,724 +3.26% +7.30% 88 Crypto.com $3.48 $54,947,010 $4,004,264 +0.65% +7.65% 89 NULS $0.78710 $54,697,441 $15,022,671 +4.50% +22.08% 90 PIVX $0.95530 $54,243,145 $3,607,818 +6.92% +13.65% 91 Elastos $3.57 $53,770,878 $8,227,987 +19.35% +32.16% 92 Loom Network $0.06963 $53,171,812 $1,738,632 -1.20% -3.90% 93 Electroneum $0.00578 $53,118,036 $282,997 -1.26% -8.30% 94 ThoreCoin $596.40 $51,699,323 $113,679 +0.47% +8.04% 95 Zcoin $7.21 $51,255,775 $1,244,348 +1.03% +6.11% 96 Aelf $0.18056 $50,555,407 $6,545,973 -1.48% +4.87% 97 QASH $0.14262 $49,916,928 $114,715 +1.46% -7.70% 98 Aion $0.16573 $48,371,228 $3,184,534 +6.72% +14.20% 99 WaykiChain $0.25213 $47,651,744 $3,620,969 +0.22% +24.03% 100 Qubitica $16.85 $47,188,787 $79,710 -0.33% -4.99% Scroll Up
Bitcoin, trapped in a more than year-long bear market, has lost some 80% in value over the last 15 months and caused many of those in the nascent industry to change or postpone their bitcoin and cryptocurrency plans.
The bitcoin price, after rocketing to an eye-watering near $20,000, fell back to around $4,000 late last yearwhere it has remained since the beginning of 2019.
Now, the long-awaited blockbuster initial public offering (IPO) of major bitcoin and cryptocurrency miner Bitmain Technologies appears to have been put on ice, causing consternationamongst the burgeoning cryptocurrencyindustry.
Bitcoin's rapid rise and subsequent price collapse resulted in some companies having to rethink their short-term strategies.
China's bitcoin mining giant Bitmain Technologies this week appeared to abandon its IPOambitions after it allowed its Hong Kong stock market proposal listing to lapsesome six months after Bitmain filed an IPO prospectus.
Bitmain did, however, say it plans to reapply at an appropriate time in the future.
"We do recognize that despite the huge potential of the cryptocurrency and blockchain industry, it remains a relatively young industry which is proving its value," Bitmain said on its website. "We will restart the listing application work at an appropriate time in the future."
Bitmain, which designs hardware and microchips for artificial intelligence as well as cryptocurrency mining, was aiming to raise some $3 billion in its IPO, according to a Reuters report, citing unnamed sources.
Bitmain posted a net loss of $395 million in for the second quarter of 2018, while there were reports the company spent $500 million on failed chips over the past 18 months.
The bitcoin price epic 2017 bull run triggered a surge of investment that evaporated as the bitcoin price collapsed.
Though the bitcoin price has been trading flat for a number of months now, bold bitcoin bulls have continued to talk up bitcoin and cryptocurrency prospects, with the founder and chief executive of crypto asset manager Galaxy DigitalMike Novogratz saying the next move bitcoin makes will be "higher."
Novogratz adds his voice to other bitcoin and crypto wealthy, including billionaireBinance chief executive Changpeng Zhao,EOS co-founder and BlockOne CEO Brendan Blumer, andthe billionaire Winklevoss twins of Facebook-founding fame, who went on to create the U.S. Gemini crypto exchange, who have said they still have strong faith in bitcoin and crypto despite the downturnand are betting prices will move higher.
The bitcoin sector is currently trapped in a long-running bear market, with some$400 billion in value wiped from the world's cryptocurrencies over the past 14 months.
Bitcoin's epic 2017 bull run was largely put down to expectations institutional investment and big bank support for bitcoin would soon arrive. As 2018 dragged on and that investment failed to appear many investors and traders got cold feet,bailing out of their bitcoin and cryptocurrency positions.
Many bitcoin investors and traders are however looking toward things likethe highly-anticipated Bakkt bitcoin platformand a U.S. bitcoin exchange-traded fund (ETF) to boost the price, though those expectations have been somewhat dampened lately as the U.S. Securities and Exchange Commissionfrets over potential price manipulation.
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Blow To Bitcoin As World's Largest Cryptocurrency IPO Is Iced
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Pleasesee this FAQ with more details:
Reporting cryptocurrency is similar to reporting a stock sale. You'll need to report your cryptocurrency if you sold, exchanged, spent or converted it.
You have to do this for every trade you made. If you bought coins at different prices or sold partial amounts, then you have to keep track and record the difference of what you sold. Cryptocurrency exchanges are not required to provide a 1099-B or summary tax statement for cryptocurrency transactions. Its your responsibility to keep records of your transactions. The most common way to do this is to download your order or trading history from your exchanges website. You may need to do this a few times throughout the year due to limits on how far back you can get information.
Once you have your figures:
There's an upload limit of 250 cryptocurrency transactions in TurboTax. If you have more than that, youll need a transaction aggregator. Well walk you through that in the cryptocurrency section.
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How and where do I report Cryptocurrency coin-to-coin ...
(Newser) A CEO's untimely death, hard-to-crack passwords, and up to $190 million in missing cryptocurrency. These all underlie a mystery that Fortune calls the "implosion of Quadriga" after the December death of the QuadrigaCX coin exchange's chief, Gerald Cotten, at the age of 30, and now the FBI and Royal Canadian Mounted Police are reportedly involved. Cotten allegedly died in India of Crohn's disease complications, and he was the only one with access to the accounts of 115,000 Quadriga customersbut he apparently didn't leave his passwords with anyone, including his widow. The auditor Ernst & Young did manage to eventually get into the exchange, but it did so to a shocking find: All the digital wallets were cleaned out, per the BBC, which notes most of the funds were originally thought to be in "cold storage," meaning they weren't supposed to be accessible via the internet.
However, the E&Y report found 14 user accounts Cotten had "created outside the normal process," and CoinDesk poked around the transaction records and found indications someone moved the missing currency to "hot wallets" on other exchanges. Some even wonder if Cotten faked his own death, per Fortune. The upshot for Quadriga customers, per reporter Amy Castor, who offers a timeline of what happened with the exchange: "All of your money is gone." There's a $100,000 reward on the missing funds from Kraken, another cryptocurrency exchange, whose CEO, Jesse Powell, wants to both help his own customers who lost money through Quadriga and also keep the reputation of the cryptocurrency market overall intact. "I ... think you've got to get the family and staff and shareholders in a room for a few hours of interrogation to get to the bottom of what's going on," he tells Fortune. (Read more cryptocurrency stories.)
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Hundreds of Millions in Cryptocurrency Vanishes After ...
An ongoing cryptocurrency bear market is not dampening interest for Fidelity's new institutional cryptocurrency products.
Fidelity Digital Assets, a new company created by the investing giant last year, has quietly rolled out its cryptocurrency custody and trade execution operations. In the past few months it has been up and running with institutional investors like hedge funds and family offices, according to its top executive.
The collapse in cryptocurrency prices over the last year "haven't had an impact" on getting up and running, Tom Jessop, head of Fidelity Digital Assets told CNBC at the DC Blockchain Summit this week. "If you started a crypto fund at the height of the market you're probably hurting right now."
Bitcoin, along with thousands of other digital coins, sparked a buying frenzy among retail investors in late 2017. The world's largest cryptocurrency has dropped more than 80 percent since its high of almost $20,000 at the end of 2017 and was trading near $3,789 on Friday.
Still, Jessop said there's long-term interest from institutional investors to add some form of cryptocurrency to their portfolios. It's often seen as an uncorrelated risk, or a store of value in a crisis. Others see a trading opportunity given the sector's volatility. Fidelity commissioned research to gauge the level of that interest.
The firm interviewed roughly 450 institutions, everyone from wealthy families to hedge funds, pensions and endowments. About 22 percent of the respondents already own cryptocurrency, according to the findings. Those that already own it expect to double their allocation over five years.
"If anything, they are as encouraged now as they were when prices were higher," Jessop said.
Fidelity's new company will execute trades on multiple exchanges for these professional investors. It also handles custody, or the safe storage of digital assets. Until Fidelity, there had been a noticeable lack of a big U.S.-based company in that business.
Jessop said while the company is live, certain aspects are still a work in progress. Fidelity is expanding the jurisdictional coverage of where it can do business. And its offerings are not one-size-fits-all. Some customers were using the platform in January, while for other customers, it was March. Others may wait until September, he said.
"It really depends on the facts and circumstances of each client," Jessop said.
Fidelity, a roughly 72-year-old family-controlled firm, is known for managing retirement plans and mutual funds. But it also spends $2.5 billion per year on technologies like artificial intelligence and blockchain. The new digital asset company was born out of the Fidelity Center for Applied Technology, or FCAT as employees call it.
Jessop said many institutional investors are still in "wait and see" mode when it comes to putting money into crypto.
"At some point, there will be an attractive entry point," Jessop said. "But by the same token people don't want to be early even if we're well off the highs."
Much of that hesitation has to do with volatility, he said. The digital currency market has been known to jump or sink by 10 percent in a single day. While prices in 2019 have been relatively stable, institutions are still wary of those sudden price moves, according to the Fidelity survey. That issue should be solved as the market structure matures, Jessop said.
Education is another roadblock to greater acceptance by investors. Jessop said the more educated a firm was on the topic, the more likely they were to be holding cryptocurrency.
"They've approached us wanting to learn, which is an encouraging sign," Jessop said. "That's not to say that there's a cohort of people that once they get educated will still have a negative view."
WATCH:How to start your very own cryptocurrency
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JPMorgan is creating its own cryptocurrency - CNN
QuadrigaCX says it can't reach millions of dollars' worth of bitcoin and other cryptocurrency after its CEO died during a December trip to India. The CEO's laptop is encrypted, the company says. Dan Kitwood/Getty Images hide caption
QuadrigaCX says it can't reach millions of dollars' worth of bitcoin and other cryptocurrency after its CEO died during a December trip to India. The CEO's laptop is encrypted, the company says.
The QuadrigaCX cryptocurrency exchange says it can't access some $190 million in bitcoin and other funds after its founder and CEO, Gerald Cotten, died at age 30 without sharing the password for his encrypted laptop.
Cotten was "the sole officer and director" of the Canadian cryptocurrency exchange when he died, said his widow, Jennifer Robertson, in an affidavit that is part of the company's request for court assistance as it seeks protection from its creditors.
The debt filing comes weeks after Robertson announced that Cotten had died an event she described as "a shock to all of us."
"Gerry died due to complications with Crohn's disease on December 9, 2018 while travelling in India," Robertson wrote, "where he was opening an orphanage to provide a home and safe refuge for children in need."
Robertson, who is executor of Cotten's estate, also announced that Quadriga has put new limits on daily withdrawals, trying to keep pace with demand and resolve transaction problems that lingered through much of last year.
In an update on its website about the debt filing, the exchange says it is facing "significant financial issues" that are keeping it from disbursing customers' funds.
The company says that it has "very significant cryptocurrency reserves" but that it can't locate or secure those reserves.
As of the end of January, Quadriga had some 115,000 users with balances in their accounts, Robertson said. Those users' cryptocurrency was valued at $137 million in mid-December, with another $53 million in the form of government currency. The bulk of the holdings are in bitcoin; smaller amounts are held in other popular cryptocurrencies, including Litecoin and Ethereum.
Even before Cotten's death, Quadriga was struggling to cope with transaction delays and other problems after legal disputes with a large bank and payment processors resulted in tens of millions of dollars being frozen.
In large part, Quadriga's biggest crisis lies in how it (as well as many other exchanges) stores cryptocurrency customers' funds in "hot wallets" that are used for quick-turnaround withdrawals and payments and in "cold wallets" that are stored offline to protect them from thieves and hackers.
Similar to how bank customers might split their checking and savings accounts, the cold wallets hold far more money; they are tapped only when hot wallets run low or when a user wants to make a large withdrawal. What is particularly problematic for Quadriga is that its CEO seems to be the only person who held the keys to those transactions.
"The transfer of coins from the cold wallet to the hot wallet was performed manually by [Cotten]," the affidavit from Robertson states.
Quadriga did not have offices or a bank account of its own; in the court filing, Robertson said, "Gerry ran the business through his laptop, mostly at our home, but also wherever he happened to be."
"I do not have any documents or records" for the business, Robertson added, saying that she had searched the couple's home in Fall River, Nova Scotia, and other locations but had found nothing.
The laptop that Cotten used to move funds between cold wallets and hot wallets is encrypted and locked leaving the exchange paralyzed after Cotten's death, Robertson said.
"I do not know the password or recovery key," she added. "Despite repeated and diligent searches, I have not been able to find them written down anywhere."
Robertson said she and Quadriga have hired a security expert to try to break the encryption on Cotten's laptop and an encrypted USB key. But she added that so far, the expert has had only limited success.
Saying "there should be in excess of $180 million [Canadian] of coins in cold storage" or $137 million Robertson wrote that the company is still trying to access the wallets, in addition to looking into the possibility that Cotten had used other exchanges to secure some of the funds.
That has left Quadriga customers wondering when and whether they'll see their money. Discussion boards on Reddit are peppered with skeptical comments about the company's efforts to work out its issues, and some users say they have upwards of $80,000 or $100,000 that has been locked away from them.
"This is a tough lesson learned. I would probably avoid [cryptocurrency] in the future," Quadriga user Elvis Cavalic of Calgary, Alberta, told the CBC news agency. After not being able to withdraw $15,000 [Canadian], he said, "They've left us completely in the dark. I'm kind of preparing for the worst."
In the debt filing, Robertson said she has faced threats and has seen speculation online about whether Cotten is actually alive some comments on Reddit and elsewhere have speculated that his death could be an elaborate ruse to siphon money away from the exchange's customers.
Robertson's affidavit notes that a copy of Cotten's death certificate was submitted to the court, with the J.A. Snow Funeral Home stating that he died on Dec. 9, 2018, in Jaipur, India.
In seeking protection from creditors, Robertson said she had convened a board of directors to run the company. And she asked the court to give Quadriga "additional time to find whatever stores of cryptocurrency may be available" and resolve other outstanding issues.
"If this cannot be done in an orderly fashion, many, if not all users, may suffer damage," she wrote.
The next legal step for the company is expected Tuesday, when it will ask the Nova Scotia Supreme Court to appoint Ernst & Young to monitor its debt proceedings as an independent third party.
When Quadriga was fully operational, its users could use a variety of means to fund an account with the exchange, from online transfers and automatic deposits to paying via cash or a debit card at thousands of Canada Post locations. Robertson said the many types of deposits made it difficult for the company to stop the inflow of money even as it lost its ability to access or disburse funds.
Robertson said Quadriga would consider selling its cryptocurrency platform as an option to fulfill its obligations to customers and creditors. Other companies have already come forward to express interest, she said, warning that the platform's value would almost certainly be undercut if the company faced a legal threat from its users.
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Cryptocurrency Exchange Says It Can't Access $190 Million ...