The founder of the Canadian Exchange, Gerald Cotten died in December with the sole knowledge of the company passwords. The death of this 30-year old Quadriga CEO was a sudden shock as he was facing complications arising from Crohn’s disease when travelling in India.
The digital currencies of Quadriga were stored securely in “cold wallets”. As per the court documents, Cotten was the only person who could access these wallets.
Currently this case highlights the risks that the investors are facing while looking after their assets in the thinly regulated industry.
According to the court file Quadriga owes 115,000 of its users the equivalent of C$250 million ($190.46 million). The document also showed Quadriga has $30 million in bank drafts, many of which had trouble depositing.
Lawyer Maurice Chiasson requested some time to find the C$250 million it owes its users. According to court documents, the company is planning to sell its platforms to cover its debts. On 5th Feb, the Halifax judge, Michael Wood, created a 30-day stay order on filing claims against Quadriga.
Ultimately, this Cryptocurrency Exchange left thousands of investors without money after the death of their CEO. Eventually resulting in customers threatening the lawsuits.
Quadriga had a message to all its investors saying,
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. Unfortunately, these efforts have not been successful.
Jennifer Robertson, Cotten’s widow claims in an affidavit that was available online saying,
I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.
To settle this issue and make it’s customers happy, Quadriga has now hired technical experts to hack into Cotten’s laptop. But, Jennifer warned that some of the data may be lost.
It is also known that it is not for the first time that the crypto industry is facing security issues. Earlier the hackers have stolen nearly, hundreds of millions of dollars’ worth digital currencies.