Cryptocurrency exchange company cannot pay clients because founder died with password

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The leading cryptocurrency exchange company in Canada has been unable to pay its customers because its founder died with their passwords.

Sky News reports that QuadrigaCX’s founder, Gerald Cotton’s death means the company cannot repay $190m (£110m) to clients. The 30-year-old is reported to have died “due to complications with Crohn’s disease” while travelling in India to open an orphanage in December 2019.

Cryptocurrency exchange company cannot pay clients because founder died with password

Before his death, Mr. Cotton was solely in charge of handling the funds and coins of the cryptocurrency exchange company. According to his wife, Jennifer Robertson, no other members of the team could access the stored funds.

She disclosed that clients’ money worth $190m (£110m) in both cryptocurrency and normal money is in “cold storage” and only her late husband holds the keys. Speaking in court, where she filed for credit protection, Ms Robertson said she has her husband’s laptop but she does not know the password. She explained that they even hired a technical expert but he has not been able to bypass its encryption. Meanwhile, the company’s board of directors have also applied for creditor protection, with Ernst & Young expected to be appointed to steer its affairs.

“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, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,” the board said in a statement. “Unfortunately, these efforts have not been successful,” the board, however, noted.

This has led to agitations from some aggrieved customers of QuadrigaCX who fear they may not be able to withdraw their monies. Some believe the company of lying to them, while others have also questioned whether Mr Cotten is really dead.

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