Crypto company can't access $200M after CEO dies with sole password

Roman Schwartz
February 5, 2019

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.

Investors in QuadrigaCX, Canada's largest cryptocurrency exchange, have been unable to access their funds since its founder, Gerald Cotten, died previous year.

Access to Quadriga CX's digital "wallets" - an application that stores the keys to send and receive cryptocurrencies - appears to have been lost with the passing of Quadriga CX Chief Executive Officer Gerald Cotten, who died Dec 9 in India from complications of Crohn's disease.

The debt filing comes weeks after Robertson announced that Cotten had died - an event she described as "a shock to all of us".

The news followed a decision by Canadian Imperial Bank of Commerce (CIBC) to freeze US$28 million of assets held by Quadriga after saying it was unable to identify the real owners of the funds.

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However, the funds stored in cold wallets were more as compared to the hot wallets.

The website for crypto exchange QuadrigaCX recently went down, and the company filed for creditor protection, citing an inability to access the "cold wallet" (a physical device not connected to the internet) where clients' cryptocurrency was encrypted.

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.

While Robertson has hold of the founder's laptop, she is unable to retrieve any passwords for it. "Despite repeated and diligent searches, I have not been able to find them written down anywhere", said Jennifer Robertson, Cotten's widow, in an affidavit.

According to an affidavit filed by the company on 31 January 2019, Cotton's death and the loss of the passcodes has cost the company access to 26500 Bitcoins worth US$92 million (~RM376 million); 1100 Bitcoin Cash worth US$1.3 million (~RM5.32 million); 11000 Bitcoin Cash SV worth US$707000 (~RM2.89 million); 35000 Bitcoin Gold worth US$352000 (~RM1.43 million); 200000 Litecoin worth US$6.5 million (~RM26.5 million); and 430000 Ether worth US$46 million (~RM188 million). She also asked the court to appoint worldwide accounting firm Ernst & Young to oversee its dealings while QuadrigaCX tries to recover the lost holdings.

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