Crypto Exchange CEO Deceased Holding Only key That Can Unlock $145 Million in Customer Coins
Quadriga CX, the Digital-asset exchange, has a problem worth of about 150 million Dollars with almost solution. The crypto startup is not able to retrieve approximately 145 million dollars (C$190 million) in Bitcoin, Ether, Litecoin and other digital tokens held for their customers, according to court documents which were on filed Jan. 31 in Nova Scotia, Halifax. Nor can the Vancouver-based Quadriga CX pay for the C$70 million in cash that they’re owed.
The access to the digital wallets of Quadriga CX’s seems to have been lost with after passing of Gerald Cotton, the CEO of Quadriga, who died on Dec. 9 at just the age of 30, in India from after complications from the Crohn’s disease.
According to the affidavit, the exchange’s offline wallet holds roughly:
- 26,500 Bitcoin (USD 92.3 million)
- 11,000 Bitcoin Cash (USD 1.3 million)
- 11,000 Bitcoin Cash SV (USD 707,000)
- 35,000 Bitcoin Gold (USD 352,000)
- 200,000 Litecoin (USD 6.5 million)
- 430,000 Ether (USD 46 million)
The CEO Gerald Cotten has always been conscious about his security, his laptop, messaging system and email addresses that he used to run and manage the 5-year-old business were all encrypted. According to his wife, Jennifer Robertson, He was the one handling of funds, coins, the accounting, and banking side of the business and for not being hacked he moved the majority of digital currencies into cold storage.
His security measures actually seem very smart, given that cryptocurrency exchange platforms go through many troubles from hackers. Moreover, Virtual Currency platforms suffered from at least five significant attacks just last year. Japan, who happens to be the host to some of the world’s most active digital-asset exchanges, has also seen two of the biggest known crypto hacks: the Mt. Gox disaster of 2014 and the robbery of nearly $500 million in digital tokens from Coincheck Inc. last Winter.
The problem is that they are not able to find his passwords or any of the business records. Experts and specialists were brought in to hack into Cotten’s other computers, and mobile phone met with only “limited success” and attempted to go around an encrypted USB key have been hindered, his widow, who lives in suburbia of Halifax, announced in the court filing.
“After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable, and some of it may be lost,” Robertson stated, continuing with that the company’s access to the cryptocurrency has been “severely compromised” and the company has been unable to negotiate bank drafts provided by different payment processors.
“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. “Unfortunately, these efforts have not been successful.”
Like always, people started to discuss this issue on Reddit’s online forums, where people started wondering if this whole business was a scam, calling for class-action lawsuits and even making conspiracy theories talking about if the CEO is not even deceased.
(n.d.). Retrieved from https://www.bloomberg.com/news/articles/2019-02-04/crypto-exchange-founder-dies-leaves-behind-200-million-problem
SmoochieWallace. (n.d.). Company Loses $145 Million Bucks Cause The Only Person Who Knew the Password Died. Retrieved from https://www.ebaumsworld.com/articles/company-loses-145-million-bucks-cause-the-only-person-who-knew-the-password-died/85877919/
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