QuadrigaCX Missing $145 Million
After the founder of QuadrigaCX Gerry Cotten, suddenly died, it was revealed that the firm was missing C$190 million (~$145 million), in cryptocurrencies. According to a sworn affidavit filed at the Nova Scotia Supreme Court on January 31, the widow of Cotten, Jennifer Robertson stated that Canada’s biggest cryptocurrency exchange owes its customers about C$250 million (~$190 million) in cryptocurrencies as well as fiat currency.
The company had already announced on its website that it had filed for creditor protection. This filing gave the details of the troubles the company is facing.
Unfortunate Circumstances
Jennifer Robertson announced that her husband, the founder of QuadrigaCX, Gerry Cotten, died on December 9. He was in India opening an orphanage, but complications due to Crohn’s disease led to his demise.
The challenge that the company is now facing is that most of the cryptocurrency exchange’s reserves are locked up in cold storage wallets – offline accounts that are only accessible by Cotten.
Robertson explained that the laptop that Cotten used for business was encrypted and she did not know the password or the recovery key needed to unlock those funds. She also said that QuadrigaCX only kept a small amount of cryptos in the hot wallet, the server from which the exchange’s users could access funds. However, the amount available in the hot wallet was not specified.
According to the company’s filing, as of January 31, there were around 115,000 customers with balances on the exchange which totaled to C$70 million (~$53.43 million) in fiat currency and another C$180 million (~$137.38 million) in cryptocurrencies.
The filing also gave details of the amount the exchange held – 26,500 BTC (US$92.3 million), 11,000 BCH (US$1.3 million), 11,000 BSV (US$707,000), 35,000 BTG (US$352,000), about 200,000 LTC (US$6.5 million) and around 430,000 ETH (US$46 million). A total of US$147 million.
According to rumors, the exchange only has C$375,000 in cash, but it owes its customers C$260 million (~$198.435 million).
To make matters worse, the exchange’s board of directors dashed users’ hopes that despite looking for a solution to ease liquidity issues and release the funds held in the cold wallets, they had not been successful.
Backlash from Angry Customers
Both Robertson and QuadrigaCX have been faced with a backlash from online communities, especially from Reddit users. They have even received threats. Many users took to social media to say complain that they had not been able to access their funds for many months now. Some openly questioned whether Cotten was actually dead.
If QuadrigaCX is able to get credit protection, then its customers will not be able to sue the exchange for compensation.