The death of Quadriga’s founder, Gerald Cotten, has sent shock waves in the crypto world. Sudden demise of the 30 year old in India on December 9, due to complications from Crohn’s disease while doing philanthropic work is really sad but many credible sources are also raising eyebrows over the encrypted and unretrievable $190 million worth of digital assets in Quadriga CX’s digital wallets. According to court filings, the exchange had staggering 363,000 users of which, 92,000 were active accounts that have different cryptocurrency assets and cash.
Launched in December 2013, Quadriga CX was Canada’s largest cryptocurrency exchange that allowed users to deposit cryptocurrency and fiat currency on the exchange, which are then stored on blockchain ledgers that are only accessible by an immutable alphanumeric code, only the founder knew. Here are some of the latest findings on the case but first let me give you an overview of some noteworthy things related to this particular case.
Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost
The Encrypted Laptop and Cold Storage
Being the CEO, Cotten was always cautious about security which is understandable because of some obvious crypto exchange hacking scandals that rocked the industry in the past. For the last 5 years, Cotten moved most digital assets to cold storage, he was the only person who had access to the cold storage wallets which he used to access from his encrypted laptop and the authorities have still failed to get in. It is pertinent to mention here that Cotten was solely responsible for funds handling and banking of his company whereas, his wife don’t know any passwords nor could she find any of his business records, which surprised many who are following the case. Jennifer Robertson, Cotten’s wife stated; “After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost”. So far, the experts have found little success to break into Cotten’s laptop and an encrypted USB.
The Founder’s Will
On November 27, 2018, 12 days prior to his sudden death, Cotten signed his last ‘will’ and made his wife, Jennifer Robertson, the executor to his estate and sole proprietor of all of his assets. Among his eminent assets are his properties in British Columbia and Nova Scotia, his accounts with Bank of Montreal and Canadian Tire, an airplane, a yacht and his 2017 Lexus to name a few.
Where We Stand Now
Quadriga CX announced on 14th January about the founder’s, Gerald Cotten death and filed for creditor protection on the 31st of January, two weeks after the announcement. Citing “significant financial issues”, in a Nova Scotia court, the company’s board of directors were unable to serve customers and a hearing was scheduled on the 5th of February. To stop any lawsuits against the company, Nova Scotia Supreme Court granted a 30-day stay on the Feb 5th hearing.
In the meanwhile Xitong Zou, a software engineer has been very active to take legal action against Quadriga. Xitong claimed that he is owed C$560,000 from the company and he is part of an informal committee that will lead creditor protection proceedings against Quadriga CX.
Cotten studied at York university in Toronto and after graduating, went on to launch one of Canada’s biggest cryptocurrency exchange that allowed users to deposit cryptocurrency and cash. He always considered crypto exchange security to be the most important aspect and always rooted ‘cold wallets’, which are not connected to the internet and almost impossible to hack.
Recently, Reddit’s online forums are buzzing and calling for lawsuits against Quadriga. Many also questioned the death of the crypto exchange CEO and claimed that they witnessed Quadriga CX funds were moved, even though the exchange denied such claims and his wife has already submitted Cotten’s death certificate to court. She also requested the court to give Quadriga some time, to gain access to crypto assets stuck in cold wallets.
This is a developing story watch out this space!