Cryptocurrency worth $137 million lost after start-up owner who had all the passwords dies suddenly
Canadian company QuadrigaCX has been granted protection from bankruptcy after losing the passwords.
A Canadian court on Monday granted bankruptcy protection to a cryptocurrency exchange start-up after it lost passwords for accounts with $137 million (around Rs 981 crore) when the company’s president died suddenly, AFP reported.
QuadrigaCX’s Chief Executive Officer Gerald Cotten, 30, died of complications from Crohn’s disease on December 9 while volunteering at an orphanage in India.
In a statement, Vancouver-based QuadrigaCX said it sought protection from creditors after weeks of attempting to “locate and secure our very significant cryptocurrency reserves” following Cotten’s death. The High Court in Nova Scotia granted the application filed by Cotten’s widow Jennifer Robertson on January 31 on behalf of the company, which has also stopped currency trading on its platform.
Robertson said the company has been unable to access an encrypted computer that Cotten reportedly used to store the cryptocurrencies to 1,15,000 users. “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 added that an expert “has had some limited success in recovering a few coins and some information on Gerry’s cellphones and other computer, but not yet from the main computer he used to conduct business [with]”.
Robertson’s affidavit stated that Cotten’s laptop, email addresses and messaging system were encrypted to prevent them from being hacked, Bloomberg reported. Cotten was the only person in charge of funds and coins as well as the banking and accounting side of the business.
“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,” said the company. “Unfortunately, these efforts have not been successful.”