Cryptocurrency exchange CEO, Gerald Cotten reportedly died on December 9, 2018, and so did the password to unlock about $200 million of customers’ digital currency, which is being held in cold storage.
Quadriga CX, a Canadian digital-asset exchange managed by Cotten before his death, is in the dark in retrieving about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers. The exchange also, cannot pay the C$70 million in cash they are owed.
Cotten, whose death was related to complications of Crohn’s disease, was said to always be overly conscious about security – his laptop, email addresses and messaging system were all encrypted.
According to Jennifer Robertson, his widow, Cotten took sole responsibility for the handling of funds, coins and also the banking and accounting side of the business. To avoid being hacked, he moved the majority of the digital coins into cold storage, a security measure where a holder of crypto assets keeps the coins offline off a computer or server.
While his security measures are understandable, his widow said she has no information as regards to his password, business records and the cold storage. Experts brought in to hack into his systems backed out with only limited success.
Quadriga CX directors, posted a notice on their website on January 31, asking the Nova Scotia court for creditor protection while they address their 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 firm said.
As expected, the inaccessible million of funds as a result of Cotten’s death have raised a lot of dusts as distressed customers call for a more proper investigation into the predicament.
However, there is a ray of hope for distressed customers, as Jesse Powell, the founder of Kraken exchange tweeted that some thousands of wallet belonging to Quadriga CX is being held in their system.
“We have thousands of wallet addresses known to belong to @QuadrigaCoinEx and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if @rcmpgrcpolice are looking in to this, contact @krakenfx,” Jesse tweeted.