Crypto-Crisis: Firm may have lost $145 million after CEO death in India last year

Gerald Cotten who died in India last year, had sole access to the passwords and now a huge stash of currency is locked off from people who own them leading Quadriga into crisis

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NH Web Desk

The death of Canadian entrepreneur Gerald Cotten, died due to complications with Crohn's disease while travelling in India on 9th December, has left a huge stash of cryptocurrencies locked off from the people who own them. He took sole responsibility for the management of funds and coins and the banking and accounting side of the business and, to avoid being hacked, and moved the "majority" of digital coins into cold storage.

Many of the digital currencies held by Quadriga are stored offline in accounts known as "cold wallets," a way of protecting them from hackers. Cotten appears to have been the only person with access to the wallets, according to court documents cited by Canadian media and posted online by cryptocurrency news site CoinDesk, CNN reported.

Cotten's death has plunged Quadriga into crisis and left it struggling to figure out how to refund more than 100,000 of its users. The company filed for creditor protection in the Nova Scotia Supreme Court last week.

The Nova Scotia Supreme Court Justice Michael Wood granted Quadriga a 30-day stay on Tuesday February 5 in a bid to stop any lawsuits and charges from proceeding against the firm for now, the Canadian Press reported the firm was also granted protection from its creditors

"For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets. Unfortunately, these efforts have not been successful," Quadriga said in a statement on its website.

The online firm is unable retrieve about C$190 million ($145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the C$70 million in cash they’re owed.

Many investors are calling it a huge scam and are calling for class-action lawsuits and even concocting conspiracy theories that call into question whether the CEO is even deceased some customers are claiming he faked his death to steal their assets

Interestingly Cotten signed his last will and testament on Nov. 27, 2018 just 12 days before his death leaving all his assets to his wife, Jennifer Robertson, and made her the executor to his estate, the documents show.

Cotten's widow, Jennifer Robertson, said in the affidavit posted online that the laptop that Cotten used to run the currency exchange is encrypted. "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," she said. "After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost," Robertson said, adding that the company’s access to currency has been "severely compromised" and the firm has been unable to negotiate bank drafts provided by different payment processors

The company hired an investigator to see if any information could be retrieved but ongoing efforts have had only "limited success in recovering a few coins" and some information from Cotten's computer and phone, BBC reported.

The Canadian High Commission in New Delhi told CNN that it was aware of Cotten's death and had "provided consular assistance," but declined to reveal further details.

Many investors are calling it a huge scam and are calling for class-action lawsuits and even concocting conspiracy theories that call into question whether the CEO is even deceased some customers are claiming he faked his death to steal their assets. However, later a death certificate, issued by the Government of Rajasthan’s Directorate of Economics and Statistics, was unveiled, which stated that Gerald William Cotten died on Dec. 9

With inputs from IANS

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