Gerald Cotten, founder and CEO of the digital exchange company Quadriga CX has died, and apparently he is the only one with the password to unlock all his customer’s crypto coins. Gerald’s death has led to the loss of CAD $190 million (U.S. $145 million) that was stored in the platform’s cold wallets.
Apparently all these investments were stored in the platform’s cold wallet and kept offline in order to ensure hackers could not access them. As published by Fortune, roughly 26,000 Bitcoin, 11,000 Bitcoin Cash, 200,000 Litecoin, over 400,000 Ether and other cryptocurrencies are stored in the platform’s cold wallet.
Gerald’s widow, Jennifer Robertson says she does not know how to access the cold storage facility since only Gerald knew its password. According to an affidavit from Jennifer;
“The laptop computer from which Gerry carried out the Companies’ business is encrypted and I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.’’
Experts who were brought in to try and hack into Gerald’s other computers and mobile phones also failed to access the encrypted keys.
Quadriga CX Seeks Court Protection
Just recently the Canadian exchange filed for protection from creditors in the Nova Supreme Court, claiming to have failed to access the funds since Gerald’s death in early December. The exchange is now expected to ask a judge to appoint Ernst and Young as an overseer for its financial issues at a court hearing set for Tuesday.
In a statement made via the company’s website, their efforts to address the company’s liquidity issues have turned out to be unsuccessful.
“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.”
Parting Shot
Death can turn out to be quite a catastrophe in the crypto ecosystem and in as much as it is inevitable, there has to be back up solutions put in place in case a private investor dies with the private keys to customer’s funds, and that’s not the only place death comes in in the crypto space. You might as well want to know what will happen to your crypto investments when you die.
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