Crypto exchange can't repay customers due to sudden death of founder

05 February, 2019, 09:46 | Author: Mary Valdez
  • Death of crypto exchange founder leaves $190m in limbo

The owner of Canada's largest cryptocurrency exchange has unexpectedly died at the age of 30, taking with him the only password for a digital account holding £145 million of customers' money.

Canadian crypto exchange QuadrigaCX can't repay $190 million in client holdings because its founder died late past year with the only password that would allow access to the funds, Coindesk reported.

The report further suggested that Gerald Cotten died of Crohn's disease in Jaipur, India in December 2018, following which the company made his death public earlier in January.

Robertson has access to Cotten's laptop but writes that she is unable to open it.

The affidavit says the majority of the cryptocurrency was kept by Quadriga in a "cold wallet" or "cold storage", which is located offline and used to secure cryptocurrency from hacking or theft.

The filing said Quadriga has still been accepting funds since Cotton's death, and the company is struggling to completely cut off automatic transfers.

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According to a court filing first reported by CoinDesk, a cryptocurrency news and events company, Jennifer Robertson, identified as Cotten's widow, said the exchange owes its customers roughly C$250 million (US$190 million) in cash and cryptocurrency held in its "cold storage".

Digital-asset exchange Quadriga CX has a US$200 million problem with no obvious solution - just the latest cautionary tale in the unregulated world of cryptocurrencies.

"Despite repeated and diligent searches, I have not been able to find them written down anywhere", she said.

Robertson said she does not have a password or recovery key to Cotten's laptop. But Robertson provided the court with a copy of Cotten's death certificate, court records show, and Robertson said she and QuadrigaCX's interim chief executive have been hit with threats and "slanderous comments" by angry customers.

When QuadrigaCX broke its silence a week later, the company revealed it had filed for creditor protection in the Nova Scotia Supreme Court, according to reporting from Coindesk.

At a court hearing on February 5 the company is seeking to appoint Ernst & Young as an independent monitor.

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