Crypto Exchange Unable To Pay Out $190m To Clients After Founder Dies With Only Password
The Canadian cryptocurrency exchange QuadrigaCX has announced it won’t be able to repay $190 million of its client’s holdings after its founder died in India.
The exchange’s founder, 30-year-old Gerald Cotten was the only person who knew the passwords to the storage of the bitcoins. As reported by Coindesk, there are around 115,000 users signed up to the exchange with roughly 26,500 bitcoins (valued at $92.3 million USD) on there. There’s also 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).
QuadrigaCX has filed for creditor protection because it says it cannot access the funds stored in “cold storage”. Instead of keeping them in a bitcoin wallet, he personally kept the majority of the crypto stored to protect the coins from hacking. According to Cotten’s widow, Jennifer Robertson, he was the only person responsible for the handling of funds.
Robertson currently has the CEO’s laptop in her possession but does not know the password to his computer. When other team members tried to access the funds, they had no luck. A technical expert was even hired but was unable to bypass the encryption on Cotten’s computer.
It is unclear whether the users will ever be able to withdraw their cryptocurrency again. Coindesk reports the exchange is considering selling off its operating platform in an attempt to help pay some of its users back. Some of its users have reportedly complained about issues withdrawing funds and there’s been a lack of communication for months.
This was before QuadrigaCX announced Cotten’s death last month. He reportedly died of Crohn’s disease in Jaipur, where he was opening an orphanage.
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