Last week, a Canadian cryptocurrency exchange called QuadrigaCX, made headlines. It happened because of sudden death of company’s CEO Gerald Cotten. Now, we know more details about this curious case.
There are cases when hackers steal cryptocurrencies from holders or exchanges. For instance, over 200 BTC were stolen from electrum wallet in a hacking attack a month ago. Nevertheless, this case is much more interesting.
Death is inevitable
Gerald Cotten (30 years old) passed away probably on 9th December (the exact date is unknown) due to complications related to Crohn’s disease. Reportedly, it happened during his voluntary work in India. But the death was only the beginning.
The Canadian millionaire founded QuadrigaCX, a cryptocurrency exchange. According to reports, the platform has had, in its use, digital coins worth over 180 million CAD (almost $140 million). These funds were stored on cold wallets. Many exchanges do that to avoid any possible hacking thefts. The problem is that, only Cotton had keys to the wallets.
Jennifer Robertson, the widow, claims that she can’t find these keys or passwords to these wallets. So, it looks like these virtual assets are gone. A popular sentence: ‘take the secret to his grave’ fits here perfectly.
Problems and debts were here earlier
The Canadian exchange has suffered for more than a year now. The platform had banking issues and customers complained about difficulties with withdrawals. So, the concerns were raised among users that the sudden death of the CEO could be an exit scam.
Clients have criticized the platform for poor communication. Quadriga’s website was even offline for several days.
On 31st January, QuadrigaCX filled for a stay of proceedings with the Nova Scotia Supreme Court. The Supreme Court judge has granted the platform its application. The biggest cryptocurrency exchange in Canada has 30 days to figure things out. First, it has to recover frozen assets.
The company said that it owes roughly 115,000 people some money, both in fiat and cryptocurrency. The exchange holds approximately 26,500 bitcoin ($92.3 million USD), about 430,000 ether ($46 million), nearly 200,000 litecoin ($6.5 million), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), and 35,000 bitcoin gold ($352,000), totaling $147 million, according to the affidavit.
According to the wife, Cotten, conducted his business operations using a highly encrypted laptop. Nobody has access to it.
The company has 30 days to resolve part of its issues. However, there are still questions, we don’t have answers for.
- Are there really any cold wallets?
Yes, the widow and people from exchange say so. But we don’t have any evidence that there are any. We don’t want to make any assumptions, but there have been cases in the past when the owner or management team conducted a typical exit scam. QuadrigaCX has had problems prior to the departure of the CEO.
- If there are cold wallets, does anybody can recover the funds?
Even if the cold wallets actually exist, there is no proof that they can be recovered. The primary characteristic, of a cold wallet, is that, it should be the safest. If you lose your password and key, you are doomed. So, even if there are any cold wallets, it will be hard to recover them.
- Where is the other person?
In 2015, Cotten announced that his crypto exchange used multi-signature wallets to conduct any transfers. Multi-sig wallets require at least two people to maintain control over wallets. So, the question is: where is the other person? So far, nobody announced himself/herself as able to sign off transactions.
- What happens next?
30 days is not a lot of time to find money, pay off debts, calm down users and straighten things up. So, what will happen next? The website of the exchange states: ‘we are in the early stages of a long process’. Is it enough? We need more explanation.
There are many rumors about the death of Gerald Cotten. Two documents say that the CEO died on 9th December in India. J.A. Snow Funeral Home issued a statement of death on Dec. 12. Though, the funeral company refused to confirm or deny that it actually issued the document. That only add to rumors about possibility of faking the death and conducting exit scam. Right now, we don’t know everything and we have to wait for more information. We will update this story if anything important happens.
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