QuadrigaCX, a Canadian cryptocurrency exchange, finds itself in a pickle after the death of its 30 year old founder Gerald Cotten. The founder was the only person who had the passwords to the exchange’s cold storage. This means that most of the $190 million in client holdings that the exchange has are now stuck in limbo.
Coindesk reported that Cotten died unexpectedly in India in December. His widow Jennifer Robertson has said in a sworn affidavit with the Nova Scotia Supreme Court that the exchange owes almost $190 million to its customers in both cryptocurrency and fiat money.
The exchange has now filed for creditor protection as it can’t access the funds which were kept in cold storage for safekeeping. It only has access to a much smaller amount that was kept in a hot wallet for use in transfers.
No business records have been left behind by the deceased. His widow does have Cotten’s laptop in her possession but she doesn’t have the password. A technical expert was hired by the exchange to bypass the encryption but that didn’t help either.
The affidavit mentions that Cotten held the “sole responsibility for handling the funds and coins,” so no passwords for the cold storage were shared with the team and as such they’re helpless now.
Some have voiced concerns that perhaps the death in India has been faked as part of an elaborate exit scam to take off with clients’ holdings. However, the court filings made by Robertson include a death certificate and while the government has confirmed that a Canadian had died in India, it did not provide the specifics due to privacy laws.