QuadrigaCX loses $190 million of their customer’s money as they lose access to their cold storage wallets following founder’s death

QuadrigaCX, the largest bitcoin exchange in Canada, has lost $190 million worth of crypto after it lost access to its cold storage wallets according to a court filing. In early December 2018, founder and CEO Gerald Cotten died of Crohn’s disease in Jaipur. 

Cotten’s widow, Jennifer Robertson, filed a sworn affidavit on Thursday, January 31 with the Nova Scotia Supreme Court. The affidavit revealed the following:

• The exchange owes its customers CAD $250 million (USD $190 million) in both cryptocurrency and fiat.
• Only a minimal amount of those coins were stored in hot wallets while the rest were stored in cold storage.
• Cotten had the sole knowledge of the cold storage keys and no one else had any access to the funds stored in the cold storage.
• QuadrigaCX wants some additional time to find whatever stores of crypto they may have available and also to negotiate the bank drafts available to them.
• If they fail to recover the funds, they will sell the business to reimburse the users.

On Friday, February 1 QuadrigaCX stated:

“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. Unfortunately, these efforts have not been successful.”