Company Can't Pay Customers Because Boss Died With Password
The founder of a currency exchange in Canada who unexpectedly died last December appears to have taken the company's access to its encrypted funds with him.
Quadriga CX, the largest cryptocurrency exchange in Canada, reportedly owes its customers about A$260 million following the death of its founder Gerald Cotton as it does not have his password to retrieve most of the funds.
The 30-year-old man died suddenly of complications with Crohn's disease in early December while doing philanthropic work in India. But due to the circumstances of the unrecoverable fund, online rumours have suggested he faked his death.
According to a Facebook post from the company on January 14, he was "opening an orphanage to provide a home and safe refugee for children in need".
In a court filing reported by CoinDesk this month, Jennifer Robertson, who identified as Cotten's widow, said the A$260 million (C$250 million) in cryptocurrency and fiat currency is being held in "cold storage".
"Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost," she wrote.
As of January 31, about 115,000 customers had balances signed up on the exchange.
According to the court filing, Cotten was the sole person responsible for transferring funds between the company's "cold wallet" -- secure, offline storage -- and its "hot wallet" or online server.
Robertson wrote that her husband's laptop is encrypted and that she nor other consultants have been able to recover its contents.
She noted she had received threats and slanderous comments and had seen "a significant amount of commentary on Reddit and other web-based platforms about Quadriga, Gerry’s death (including whether he is really dead) and missing coins”.
Quadriga CX previously announced it had filed for creditor protection "to address the significant financial issues that have affected our ability to serve our customers" on its website.
A preliminary hearing to appoint Ernst & Young as an independent third party will proceed on Tuesday.
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