Quadriga: The founder of the cryptocurrency exchange locks 140 million dollars

The largest cryptocurrency exchange in Canada can not access millions of dollars in digital currency as a result of the sudden death of its founder.

Quadriga has filed for creditor protection and estimates that approximately $ 180 million Canadian ($ 137 million) in cryptocurrency is missing.

He has not been able to locate or secure his cryptocurrency reserves since the death of Gerald Cotten in December.

Cotten, 30, was solely responsible for handling funds and coins.

The widow Jennifer Robertson, the widow, said in a document filed in the Supreme Court of Nova Scotia on January 31 that the laptop on which Mr. Cotten "was managing the business of the company was encrypted and I did not know the pbadword or recovery key. "

"Despite repeated and diligent searches, I could not find them written anywhere," says the affidavit.

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

The company is also studying whether some of the cryptocurrency could be secured on other exchanges, according to court records.

They say that about 115,000 Quadriga users hold balances in their personal accounts in the form of cash and cryptocurrency bonds.

The company estimates it owes about $ 250 million ($ 190 million), including $ 70 million in hard currency.

According to the affidavit, Quadriga retained the majority of the cryptocurrency in a "cold wallet" or "cold storage" located offline and used to secure the cryptocurrency against piracy or theft.

The BC-based company's liquidity problems began in January 2018 when the CIBC Canadian bank blocked C $ 25.7 million from its payment processing system after the bank had a hard time determining who was the owner.

The death of Cotten aggravated these problems.

According to court records, the founder died suddenly from a complication of Crohn's disease while traveling in India.

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In a statement posted online last Thursday, Quadriga said it was working to resolve its "liquidity problems, which include trying to locate and secure our very large cryptocurrency reserves held in a portfolio."

The company is scheduled to appear in court in Nova Scotia on Tuesday for a preliminary hearing on the appointment of Ernst and Young as an independent monitor overseeing the proceedings.