Crypto Exchange Can't Repay $190M to Clients After Founder Dies w/ Password

RadioOnFire.com - As the obscurity behind the world of cryptocurrency continues on, a new report has indicated that Canadian based Bitcoin Exchange, QuadrigaCX, has apparently lost the passwords that lead to the bulk of $190 million in client holdings. The news follows the death of 30-year-old founder Gerald Cotten, who unexpectedly died in India in December of 2018 due to complications with Crohn's Disease.

Revealed through a sworn affidavit with the Nova Scotia Supreme Court, Cotten's widow, Jennifer Robertson, has confirmed that QuadrigaCX owes its customers approximately $190 million in both cryptocurrency and fiat money, while filing for creditor protection because they can not access the funds. 

According to the affidavit, QuadrigaCX holds 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), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million. Additionally, the exchange holds more coins in a "hot wallet," a storage used for transfers as opposed to the majority of funds that were left in the "cold storage." Robertson also maintained that Cotten held “sole responsibility for handling the funds and coins” and no other members of the team have any access.

On the QuadrigaCX website, all that can be found is a statement from the Board of Investors, that in part reads: "For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the [Supreme Court] hearing."

Elsewhere, it's now being reported that QuadrigaCX may sell the company if they're unable to settle their debts after a 30-day stay of proceedings, while the encrypted laptop is now in a possession of a court-appointed lawyer.

Source: gizmodo.com