Crypto Exchange loses key to USD 145 mn

Crypto Exchange loses key to USD 145 mn
Highlights

One of Canadas largest cryptocurrency exchanges has been granted bankruptcy protection after its 30year old founder died unexpectedly in India, taking with him passwords of tens of thousands of customers who are unable to access 145 million in funds

Toronto/New York: One of Canada's largest cryptocurrency exchanges has been granted bankruptcy protection after its 30-year old founder died unexpectedly in India, taking with him passwords of tens of thousands of customers who are unable to access $145 million in funds.

Quadriga said it was unable to gain access to Canadian dollar 190 million ($145 million) of bitcoin and other digital assets after Gerald Cotten, its CEO and co-founder, died in December. He died of complications arising from Crohn's Disease, an inflammatory bowel ailment, while volunteering at an orphanage in India.

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 is the only person with access to the wallets, according to the company.

Cotten's sudden death has plunged Quadriga into crisis and left it struggling to figure out how to refund more than 100,000 of its users, CNN reported. On Tuesday, the Vancouver-based company said it was granted creditor protection in the Nova Scotia Supreme Court in British Columbia as it tries to sort out its financial mess. Cotten's widow, Jennifer Robertson, described people posting inaccurate speculation on social media about "whether he is really dead."

"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," Quadriga said in a statement. "Unfortunately, these efforts have not been successful." Robertson said that the laptop that Cotten used to run the currency exchange is encrypted, according to a copy of her affidavit posted online by cryptocurrency news site CoinDesk.

"I do not know the password or recovery key," she said. "Despite repeated and diligent searches, I have not been able to find them written down anywhere," she said.

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