About $190m in cryptocurrency has recently been locked away in an online black account after the founder of QuadrigaCX exchange died, apparently taking his encoded access to their money with him. Stockholders in QuadrigaCX, Canada’s largest cryptocurrency exchange, were incompetent to access their funds after its founder, Gerald Cotten, died in 2018.
According to a court filing first reported by CoinDesk, cryptocurrency news and events company, Jennifer Robertson, identified as Cotten’s widow, and said the exchange owes its customers roughly C$250m (US$190m) in cash and cryptocurrency held in its “cold storage.”QuadrigaCX, the famous Canadian Bitcoin exchange, recently obtained a temporary reprieve from its creditors. The court filing also shows that QuadrigaCX currently holds: 26,500 BTC worth about $92.3 million; 11,000 Bitcoin Cash (BCH) worth about $1.3 million and another 11,000 Bitcoin Cash SV (BSV) worth about $707,000.
Experts in the cryptocurrency industry say there is a slim chance technicians will be able to recover the $180 million in digital assets believed to be in the laptop of the late founder of the insolvent QuadrigaCX exchange platform.
Robertson added that:
“The normal procedure was that [QuadrigaCX founder and CEO Gerald Cotten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”
Lawyer for Quadriga says there may be as much as $180-million of crypto “floating around out there” that they haven’t found.
— Jack Julian (@JackJulian) February 5, 2019
According to Jack Julian of the Canadian Broadcasting Corporation (CBC) who covered the proceedings at length, QuadrigaCX lawyers expressed hope that a stay of proceedings would allow the company to recover the lost funds “to the extent that they exist.”
some form of digital security probably protects access to Gerald Cotten’s computer, says Alfred Lehar, a finance professor at the University of Calgary however, Lehar says those barriers could be overcome with the right tools.
During yesterday’s hearing, a few revelations came to light. First was that the platform had neither an office or a bank account. It’s only legal proof of existence was the business registration in British Columbia.
Thus, all administrative operations of the company were domiciled on the owner’s laptop (Gerald Cotten). The reported passing away of Cotten further complicates the matter as he supposedly died without revealing his passwords.
Lehar further stated that the big question is whether Cotten’s laptop covers the private digital keys required to solve the extremely safe offline locations where the cryptocurrency is being stored called as cold wallets. Quadriga is hoping the court will set an agenda a hearing soon to check the stay of minutes, as well as appoint Ernst & Young to act as a self-governing third party to oversee its processes for the immediate future. In specific, a fee processor with Quadriga, Billerfy, has reported difficulties with looking out for a banking partner, stopping the mainframe from freeing any funds back to the exchange, and so, to its clients.
In addition to the unevenly $30 million presently being held by Billerfy, three other third-party processors have around $565,000 CAD.