crypto exchange news

QuadrigaCX’s Founder Dies, Crypto Assets Worth USD 145 Million Go Missing

After the sudden demise of the founder of the Canadian digital currency exchange QuadrigaCX, the platform is reportedly missing digital assets amounting USD 145 million.

Since Gary Cotten passed away on December 9, 2018, the exchange has been unable to access a large number of digital assets. The missing assets have led to a liquidity crisis on the exchange.

On February 1, 2019, QuadrigaCX filed the application for creditor protection which is in compliance with the Companies’ Creditors Arrangement Act (CCAA).

At the time of writing the news, Quadriga was reported to have USD 286,000 in cash. It owes the users of the exchange as much as USD 198,345,000.

Cotten had the sole access to the keys of the cold wallets where the exchange stored most of its digital assets.

A cold wallet is an offline storage method which is secured using digital security keys.

Ever since Cotten’s demise, the company has been clamouring to find the cold wallets where the assets were stored.

As per a filing from auditing Ernst & Youngst which has been appointed as a third party to monitor the case proceedings:

“Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units.”

As per sources, Cotten would work from home on an encrypted computer. Jennifer Robertson, the wife of the exchange founder said in an affidavit:

“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.”

Reportedly, Robertson had even hired a cybersecurity expert in an effort to retrieve the passwords through hacking. But the efforts were in vain.

Other crypto exchange operators have reported on the matter saying that it is quite eccentric for the control of the exchange’s funds to be placed in a single executive as such an instance can lead to extortion or kidnapping.

The CEO of Vancouver-based Einstein Exchange was quoted as saying,

“It’s the equivalent of walking around with millions of dollars in cash on you at all times.”

Further Roberston’s affidavit states:

“There have also been threats made against her. Slanderous comments have been made against her and sent through Facebook messenger to her entire contact list.”

The preliminary hearing for the creditor protection motion is scheduled for February 5, 2019.