Millions in cryptocurrencies frozen after Canadian founder’s death

Gladys Abbott
February 5, 2019

Investors in QuadrigaCX, Canada's largest cryptocurrency exchange, have been unable to access their funds since its founder, Gerald Cotten, died previous year.

The news followed a decision by Canadian Imperial Bank of Commerce (CIBC) to freeze US$28 million of assets held by Quadriga after saying it was unable to identify the real owners of the funds.

He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, to avoid being hacked, moved the "majority" of digital coins into cold storage.

Gerald Cotten died aged 30 from complications with Crohn's disease while volunteering at an orphanage in India, according to the Facebook page of Quadriga CX, which announced his death on January 14.

What was the password again? Cotten's widow said she had an expert try hacking into the founder's computers and encrypted email, but to no avail.

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Gerald Cotten, who owned QuadrigaCX, died in December.

"Despite repeated and diligent searches, I have not been able to find them written down anywhere", the affidavit states.

In a filing Thursday for creditor protection with the Supreme Court of Nova Scotia, Jennifer Robertson, Cotten's widow, said his death left the company unable to access the bulk of its crypto-currency funds, CBC News reported.

"For the past weeks, we have worked extensively to address our liquidity issues", a letter to customers on the QuadrigaCX website reads, "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". The company's stance has gone from "Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost" to "most, if not all" of their customers will suffer damages. Discussion boards on Reddit are peppered with skeptical comments about the company's efforts to work out its issues, and some users say they have upward of $80,000 or $100,000 that has been locked away from them. "I'm kind of preparing for the worst". Other companies have already come forward to express interest, she said, warning that the platform's value would nearly certainly be undercut if the company faced a legal threat from its users.

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