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

Coinbase Crypto Cold Wallet

Sky News reports that QuadrigaCX's founder, Gerald Cotton's death means the company can not repay $190m (£110m) to clients.

Gerald Cotten, CEO and sole director of the trading platform QuadrigaCX, was travelling in India on December 9 when he died suddenly from complications linked to Crohn's disease, court documents say. Inflammation caused by Crohn's disease can involve different areas of the digestive tract in different people, doctors say.

Cotten was "the sole officer and director" of the Canadian cryptocurrency exchange when he died, said his widow, Jennifer Robertson, in an affidavit that is part of the company's request for court assistance as it seeks protection from its creditors. His widow has signed an affidavit to confirm that the cryptocurrency is owed to customers, but that neither she nor anyone else has the necessary codes to access the cold-stored cash. Robertson says that she has no business information for Cotten's company or its affiliates and that all she has is the laptop that likely contains the information they need to unlock Quadriga's cold storage system.

Robertson said she does not have a password or recovery key to Cotten's laptop.

While it is common practice for cryptocurrency exchanges to store assets in "cold wallets" - offline storage locations to protect them from hackers - it is not clear where Mr. Cotten stored the millions of dollars owed to those who traded with his company.

Another wrote in French: "I have sent lots of emails, but I just get automatic responses, I'm not even able to get my crypto out".

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The company could have access to about $30 million in bank drafts, but regular financial institutions have made it clear they are nervous about handling those funds, Chiasson told the court.

Quadriga was a platform that allowed customers to buy and sell cryptocurrencies, with accounts being credited either by the depositing of cash or cryptocurrency. Like many exchanges, QuadrigaCX only kept a small amount of cryptocurrency in its "hot wallet" for transfers. They've left us completely in the dark. "I'm kind of preparing for the worst".

But Robertson provided the court with a copy of Cotten's death certificate, court records show.

"If this can not be done in an orderly fashion, many, if not all users, may suffer damage", she wrote. Yet, in the analysis performed by ZeroNoncense through the blockchain, there is no funds that QuadrigaCX claimed to have.

About C$180 million ($137.21 million) in cryptocurrencies have been frozen in the user accounts of Canadian digital platform Quadriga after the founder, the only person with the password to gain access, died suddenly in December.

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