After its founder, the 30-year-old Gerald Cotten unexpectedly died in December last year, QuadrigaCX, one of Canada’s most popular cryptocurrency exchanges, says it does not have access to $190-million worth of customers’ funds. According to court documents, the company is now seeking creditor protection.
The nearly $190 million in cryptocurrency have been locked in an online black hole, known as ''cold wallets.'' According to the court filings, Cotten's widow, Jennifer Robertson, her late husband was the only one to have encrypted access to the funds, and he left no passwords behind.
The cold wallets are kind of offline storage to deposit cryptocurrency and protect them from hackers and other digital threats. Cotten was the only one to have virtual keys to these cold wallets, and he was the one in charge of transferring cryptocurrency between cold storage and ''hot wallets,'' as per the court filings. As his widow stated in the documents, the Quadriga’s inventory of cryptocurrency has become unavailable, and some of the funds could be lost.
Gerard Cotten passed away from complications from Crohn's disease while he was traveling in India in December last year to open an orphanage and help unprivileged children in need. His life partner, Jennifer Robertson, has never been involved in the business, the court filings showed. Although she is in possession of his late partner's business laptop, it is encrypted, and she cannot access its content.
The troubled cryptocurrency firm currently has only $375,000 in cash, while it owes nearly $260 million to around 92,000 customers. In the last few months, Quadriga became notorious within the community for outstanding delays in processing large withdrawal orders from customers. In one of his previous interviews, Gerald Cotten did not decline the company's processing delays. Instead, the blamed the Canadian banks for lack of support for the country's expanding crypto-related businesses.
Gerald Cotten found Quadriga in 2013 to offer a user-friendly platform for individual clients to buy, sell and trade cryptocurrency. Its users could deposit regular valuta through bank transfers, drafts, and more. However, the company, like many others in the sector, received little regulatory oversight.
Brian Mosoff, an angel investor interested in blockchain and cryptocurrency, and CEO of Ether Capital commented that Quadriga's application for credit protection proves the increased need for proper regulation in the blockchain industry to ensure investors'protection and decent back up.
What about your passwords? Have you shared them with your loved one in case something bad happens to you?