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Following the sudden death of its founder Gerry Cotten, QuadrigaCX, a cryptocurrency exchange, reportedly lost $ 190 million in digital badets, reports the Canadian daily newspaper The Globe and Mail on Feb. 1.
Citing a file of protection against creditors of the Supreme Court of Nova Scotia, The Globe and Mail said that the company had not been able to locate funds or access these funds since the transfer of Cotten December 9, which led to a liquidity crisis on the stock market. On February 1, QuadrigaCX filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA).
The exchange has only C $ 375,000 ($ 286,000) in cash, while C $ 260 million ($ 198,435,000) is owed to its users.
The stock market has retained most of its badets in off-line storage systems called "cold wallets," which are secured with digital security keys to protect them from hacking and theft. Cotten was solely responsible for the portfolios and keys, which the company tried to find after his death.
A record of Ernst & Young reportedly stated: "Quadriga was unable to access the cold wallets and / or discovered that these contained a minimal number of cryptocurrency units". The Big Four audit firm, Ernst & Young, has been appointed as an independent third party to oversee the procedure.
According to the Globe and Mail, Cotten has mainly worked at home on his computer, which is encrypted. Cotten's wife, Jennifer Robertson, said in an affidavit: "I do not know the pbadword or the key to recovery. Despite repeated and diligent searches, I could not find them written anywhere. Robertson would have gone so far as to hire a cybersecurity expert to "hack Gerry's computers" to no avail.
Other stock traders told The Globe and Mail that it was unusual for a single officer to control access to stock market funds, as it would have made Cotten a target for kidnapping and extortion. Michael Gokturk, CEO of Einstein Exchange in Vancouver, said, "It's the equivalent of walking around with millions of dollars in cash, anytime."
Platform users, some of whom were already unable to withdraw funds due to a legal battle between the exchange and a major Canadian bank, turned to Twitter and Reddit following the announcement of the death from Cotten. Some users have asked for proof of death or obituary.
Robertson's affidavit allegedly stated: "Threats have also been made against [her]. "Slanderous comments were made against [her] and sent via Facebook Messenger to [her] the whole list of contacts. Robertson itself would pay the creditor protection claim and a preliminary hearing was scheduled for February 5.
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