Crypto exchange QuadrigaCX is unable to access its cold wallet
Founder of QuadrigaCX, 30-year-old Gerald Cotten, unexpectedly had died in December while in India, from Crohn’s disease. He reportedly had sole access to the cold wallet. QuadrigaCX owes its customers $190 million and cannot access most of the funds.
According to a Jan. 31 affidavits filed by his widow Jennifer Robertson and dug up by Coindesk, Cotten had sole access to most of the exchange’s $190 million worth of crypto held in cold storage.
No one appears to be able to access QuadrigaCX
Because when he died, Cotten took the keys with him.
His death is a very sad moment for the family, big loss, of course. But customers are in sorrow, too.
In a sworn affidavit filed Jan. 31 with the Nova Scotia Supreme Court, Jennifer Robertson, identified as the widow of QuadrigaCX founder Gerald Cotten, said the exchange owes its customers roughly $250 million CAD ($190 million) in both cryptocurrency and fiat.
The customers of QuadrigaCX seem to be really worried as the Canadian crypto exchange can no longer access its cold storage and it owes its customers nearly $190 million, according to a report by CoinDesk.
QuadrigaCX went offline a few days ago.
Initially, it was thought that routine maintenance was the cause of the sudden malfunction. But now it seems that there is something bigger behind. Bigger than what was initially thought. Reddit users are saying it is just another ‘Exit Scam’.
However, Quadriga users, are now concerned that the unannounced downtime for the QuadrigaCX website, is a sign that something might be very wrong with the crypto exchange.
Some Reddit users asked if QuadrigaCX shouldn’t have let their customers know before taking its site down. Another Reddit user speculated as to whether the exchange had gone bankrupt due to an inability to find a suitable bank to host an account and facilitate transfers.
Reddit users are asking for proof of death, while one user claimed that the exchange, most likely, couldn’t access assets in cold storage, as the keys were only known to Cotten.
According to the affidavit, the cryptocurrency exchange holds nearly 26,500 Bitcoin ($92.3 million USD), 11,000 Bitcoin Cash ($1.3 million), 11,000 Bitcoin Cash SV ($707,000), 35,000 Bitcoin Gold ($352,000), nearly 200,000 Litecoin ($6.5 million) and about 430,000 Ether ($46 million), amounting to nearly $147 million.
Speaking about the current difficult situation, Jennifer Robertson said, “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.”
She also added that the sole responsibility of handling the funds remained with Gerald Cotten and no one else has access to the exchange’s cold wallet.
The board of the company encouraged its customers.
They stated that the issue is being handled in the best possible way and an affidavit has been filed in the Nova Scotia Court requesting the authority to appoint a third party to help the exchange in finding a solution for the problem.
If the application for creditor protection is accepted by the Courts, then the court might give QuadrigaCX at least 30 days of protection from its creditors.
There is also a possibility that some of Quadriga funds are being stored on other exchanges, though this has not been confirmed.
The Courts will rule on the request for creditor protection on February 5.
Seems a bit suspicious that Gerald Cotten was the only one that had access to these coins. It is really hard to believe.
But the whole enigma about crypto exchange QuadrigaCX become weirder because they claimed they used multi-sign wallets.
It looks entirely as the result of poor governance and processes and that’s why we need regulated exchanges.