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QuadrigaCX, a cryptocurrency exchange based in Canada, finds itself in hot water as it owes its customers $190 million – but is unable to access most of the funds due to the untimely death of its founder.
The exchange’s founder, Gerald Cotten, reportedly died of Crohn’s disease in Jaipur, India late last year. Quadriga announced his death earlier this month to members of the exchange, and even produced a death certificate as proof.
Jennifer Robertson, widow of Cotten, said in a sworn affidavit filed January 31 that Quadriga owes its customers about $190 million in both cryptocurrency and fiat. According to the document, obtained by CoinDesk, the exchange holds about 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), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million.
Following Cotten’s death, “Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost,” Robertson claimed in the document, since only he knew the passwords to the exchange’s “cold storage”.
It was not made clear which portion of the exchange’s cryptocurrency holding was kept in cold storage, and which was in its hot wallet.
Robertson explained in the affidavit that “only a minimal amount of coins” were stored in the hot wallet, but did not go into further detail as to the exact amount.
Although Robertson has access to Cotten’s laptop, she does not know his password. A technical expert hired by Quadriga has been unable to bypass the laptop’s encryption. Robertson also noted that Cotten left behind no business records.
“The normal procedure was that [QuadrigaCX founder and CEO Gerald Cotten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft,” she remarked in her statement.
According to Robertson, Cotten held “sole responsibility for handling the funds and coins.” Quadriga’s other team members did not have any access to the exchange’s cold wallets and have yet to find a way in. She also added that there is a possibility that some of Quadriga’s funds might be stored on other exchanges – however this has not been confirmed.
