Published: Tue, February 05, 2019
Money | By Ralph Mccoy

Cryptocurrency Exchange QuadrigaCX Loses US$145 Million With Death Of CEO

Cryptocurrency Exchange QuadrigaCX Loses US$145 Million With Death Of CEO

Cotten allegedly held "sole responsibility for handling the funds and coins" for an exchange that boasts roughly 26,500 Bitcoin ($92.3 million USD), 11,000 Bitcoin Cash ($1.3 million), 11,000 Bitcoin Cash SV ($707,000), 35,000 Bitcoin Gold ($352,000), almost 200,000 Litecoin ($6.5 million) and about 430,000 Ethereum ($46 million), totaling $147 million.

The firm, Canada's largest cryptocurrency exchange, also faces other unrelated banking issues, and says it has applied for creditor protection as it seeks to address "significant financial issues".

Evidently Cotten was the sole person responsible for transferring QuadrigaCX funds between the company's "cold wallet" - secure, offline storage - and its "hot wallet" or online server, according to court documents.

Very little cryptocurrency was stored in the hot wallet for security purposes.

The company announced his death more than a month later, posting on Facebook that Cotten died due to "complications with Crohn's disease on December 9, 2018 while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need".

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Robertson has access to Cotten's laptop but writes that she is unable to open it. Cotten's widow said she had an expert try hacking into the founder's computers and encrypted email, but to no avail. The company's stance has gone from "Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost" to "most, if not all" of their customers will suffer damages.

In a sworn affidavit with the Nova Scotia Supreme Court, widow Jennifer Robertson admitted the firm owed 250 million Canadian dollars in both cryptocurrency and cash to as many as 115,000 account holders.

Gerald Cotten, who owned QuadrigaCX, died in December. "I would probably avoid [cryptocurrency] in the future", Quadriga user Elvis Cavalic of Calgary, Alberta, told the CBC news agency.

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.

In seeking protection from creditors, Robertson said she had convened a board of directors to run the company.

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