Canadian news portal The Globe and Mail reported that QuadrigaCX, a Canadian crypto exchange, lost $ 126.5M ($ 190M) worth of cryptocurrencies following the sudden death of its founder and sole director, Gerald Cotten.
The troubled stock exchange has filed a claim for bankruptcy protection under the Companies’ Creditor Arangement Act (CCAA) at the Supreme Court in Nova Scotia to avert the threat of bankruptcy. Allegedly you could raise only 250k € of the approximately 175M €, which are owed around 92k users. You can not access Cold Wallet held 26.5k Bitcoins (~ 80M €), 430k Ether (40.5M €) and some millions of € in Bitcoin Cash SV, it said in an official statement.
This was attributed to the fact that the 30-year-old Cotten sole administrator was the private key to the Cold Wallets. Cotten is said to have suffered from Crohn’s disease for 6 years and suddenly died of complications on a trip to India. He is said to have steered the business of the crypto exchange, which was founded in 2013, for the most part solely from his laptop. His wife, Jennifer Robertsen, emphasized that she did not know the access details and did everything possible to get hold of the important keys. So she searched the house and even ordered the hacking of an encrypted USB stick order whereby a few digital coins could be saved.
The operators of other Canadian crypto-exchanges called it highly unusual and dubious that only one person can access such a large value depot. This would have made travel-loving Cotten vulnerable to kidnapping and extortion, said CEO of the Einstein Exchange in Vancouver Michael Gokturk. “That would be the same as running around in cash with millions of dollars,” he added.
The remainder of the funds due is tied to external payment processors. Thus, for example, the Canadian Imperial Bank around 17.8M € because the ownership rights were unclear.
The dedicated auditing firm Ernst & Young inc. said in a report that the bookkeeping either does not exist or a reproduction would be impossible. A sale of QuadrigaCX is being considered.
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