Clients unable to access $145m after company's CEO dies

Clients unable to access $145m after company's CEO dies

QuadrigaCX ($QUADRIGACX), the Canadian cryptocurrency exchange company, argued in a Nova Scotia Supreme Court that it can not pay back $190 million to clients after its founder, 30-year-old Gerald Cotten, died and being the only one who knew the password to the company's "cold storage".

According to a recent filing for creditor protection made in the Nova Scotia Supreme Court, around C$250m (£105m) of crypto coins are missing since the death of its founder Gerald Cotten in December.

Gerald Cotten, CEO and co-founder of QuadrigaCX, died of complications from Crohn's disease December 9 while traveling in India to set up an orphanage, the firm wrote January 14 on Facebook.

Quadriga, which is based in Vancouver, also owes about 70 million Canadian dollars ($53 million) in cash that it's unable to pay back, she said, citing difficulties accessing funds through the traditional banking system.

"The laptop computer from which Gerry [Cotten] carried out the Companies' business is encrypted, and I do not know the password or recovery key", Robertson said in her filed affidavit. The digital coins included bitcoin, litecoin and ether.

At a court hearing on February 5 the company is seeking to appoint Ernst & Young as an independent monitor.

QuadrigaCX has since experienced major issues of pumping out customers' funds to their accounts, with the crypto exchange saying it is going through "significant financial issues".

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"Unfortunately, these efforts have not been successful", the statement added. A burgeoning industry of hypnotists and brute force hackers make good money trying to access inaccessible money-taking as much as a fifth of what they find.

Sky News reports that QuadrigaCX's founder, Gerald Cotton's death means the company can not repay $190m (£110m) to clients.

It will, however, all be of little comfort to the roughly 100,000 customers whose investments were lost because nobody at the exchange sought to obtain an copies of the CEO's access keys.

Robertson says that while she has Cotten's laptop, it's encrypted and she does not have the password.

The company is also investigating whether some of the cryptocurrency could be secured on other exchanges, according to court files.

At the time, QuadrigaCX claimed the Canadian Imperial Bank of Commerce (CIBC) locked the funds and froze the accounts belonging to its payment partner.

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