Cryptocurrency exchange loses $145 million as founder's death locks out investors
MANILA, Philippines – Investors in Canadian cryptocurrency exchange Quadriga CX are unable to retrieve their funds after the death of founder and CEO Gerald Cotten – the only person in the company with an access key to the exchange's business records.
Bloomberg, which cited court documents filed last January 31 in Halifax, Nova Scotia, reported Quadriga and its customers were locked out of about Can$190 million, equivalent to about $145 million in Bitcoin, Litecoin, Ether, and other digital tokens.
"After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost," Cotten’s widow Jennifer Robertson said in an affidavit.
Cotten died last December 9 in India due to complications from Crohn’s disease.
Before his death, Cotten was reportedly very conscious of security, which is why he had the laptop, email address, and messaging system he used to run the company encrypted. He held “sole responsibility for handling funds and coins,” according to the affidavit filed by Robertson.
She also said that she does not have business records of the company and doesn’t know the password to access her late husband’s devices. Experts, meanwhile, were only met with “limited success” in their attempt to hack into the encryption.
The company failed to negotiate bank drafts provided by different payment processors, which lead its directors to seek the creditor protection from the Nova Scotia court while they address “significant financial issues."
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us," the company said in a notice published in their website. “Unfortunately, these efforts have not been successful." – Rappler.com