Quadrigacx, Canada’s largest crypto currency company is seeking creditors protection, after CEO Gerald Cotten death. (Photograph By PNG)
Kettelia Wright
Canada’s largest cryptocurrency exchange QuadrigaCX cannot pay back investors some $190 million because the CEO died without anyone else knowing the encrypted password that gives access to all accounts.
Co-founder Gerald Cotten, 30, died in December “due to complications with Crohn’s disease, while traveling in India, to open an orphanage,” his wife Jennifer Robertson said in a court filing.
According to Coin Desk, Robertson said they cant access $250 million ( USD $190 million) in cryptocurrency and what’s known as “fiat” which refers to physical or other types of currency. The company announced on Jan. 31 that it had filed for creditors protection in the Nova Scotia Supreme Court to address the issues that prevent them from serving their customers.
The hearing was set to take place Feb. 5.
In a statment the company said it is trying “to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us.”
Equity market trading expert Andreas Park told Humber News he saw this coming a long time ago.
“This incident shows all the things that are wrong with these exchange venues. I’ve been going on about this for years that these trading venues are dangerous, and they behave like banks but there’s absolutely nothing that keeps them safe or investors deposit safe,” said Park, a faculty member at the University of Toronto.
The filing shows that thetr are 363,000 registered users in the Quadriga database.
As of the date of the filing, 115,000 users had been affected. QuadrigaCX now owes them $70 million in cash, and also owes them $180 million in cryptocurrency, reaching the total of $250 million owed overall.
@QuadrigaCoinEx What is happening with QuadrigaCX? I have bitcoin and cash on your exchange that I would like to access…..
— Curtis Murphy (@LTC_Leprechaun) January 30, 2019
As of January, Quadriga held 26,488 in bitcoins, 11, 378 in Bitcoin cash, 11, 149 in Bitcoin cash sv, 35, 230 in bitcoin gold, almost 200,000 in Litecoin, and 429,966 in Ethereum according to the filing.
Quadriga is facing major issues with The Canadian Imperial Bank of Commerce (CIBC). They froze over $27 million of funds that had been held in an account by Quadriga payment processor, Costodian, and Jose Reyes. According to the Supreme Court documents the account went into major overdraft, and CIBC now refuses to permit any other withdrawals.
Robertson noted in the affidavit that she was not involved in the business while her husband was alive.
“Since he has passed, I’ve learned significantly more about the company,” she said.
She said she has been facing a lot of backlash online, as well.
“There have been significant amount of commentary on Reddit and other web based based platforms about the state of Quadriga, Gerry’s death (including is he really dead) and missing coins. There have also been threats made against me, and slanderous comments through facebook messenger and all my contact list,” Roberson said.
Jennifer Robertson Affidavit by on Scribd
The exchange plans to explore all options available to it, to address it’s obligations to affected users.