Quadriga customers are unable to gain access to $145 million in bitcoin and other digital assets after its founder and CEO died of complications arising from Crohn's Disease while traveling in India.
Customers of Quadriga, once Canada's largest and most popular cryptocurrency exchange, are reportedly unable to access their funds after its 30-year-old founder Gerald Cotten died unexpectedly in Jaipur, India, in December 2018, while holding the passwords needed to access the money, the Financial Times (behind paywall) reported.
The funds, which total about $150 million in bitcoin, litecoin, ether and other cryptocurrencies, are held in encrypted «cold wallets» that are not connected to the internet, with their digital keys only known to Cotton.
In a post on its website on February 5, the exchange said it had filed for creditor protection, with the court appointing independent third party Ernst & Young to oversee the proceedings.
According to an order issued by the Supreme Court of Nova Scotia on February 5, the exchange also owes about $50 million in cash to its users. The exchange has about 363,000 users, with 92,000 accounts holding cash or cryptocurrency balances, including one with assets totaling $50 million.
An Elaborate Hoax?
Conspiracy theories have been circulating on online forums over the suspicious circumstances surrounding Cotten's death and the fact that Quadriga had been mired in legal and financial issues for a long time. With death fraud a possibility in India, the crypto community has demanded proof of his death, wedding, or evidence of his trip to the country.
Chief executive of the cryptocurrency exchange Kraken Jesse Powell called the story «unbelieveable» in a Twitter post.
According to court documents, Cotten's will was filed on 27 November 2018 – 12 days before his death. He left all his assets, including several properties, a Lexus, yacht, plane, and frequent flier points and rewards, to his wife, Jennifer Robertson, also an employee of Quadriga, and made her the executor to his estate. His marriage was not public knowledge before this, and Quadriga only made his death known to its customers a month after the fact.
