Imagine being locked out of your crypto stash through no fault of your own. You just wake up one day, try to login, and nothing happens because the person in charge is suddenly gone. For many customers of the crypto exchange Quadriga CX, that’s exactly what’s happening.
Nearly $200 million in cryptocurrency funds are locked away after the founder of Quadriga CX – 30-year-old Gerald (Gerry) Cotton – passed away last December from Chron’s disease in India. Cotton’s widow – identified as Jennifer Robertson in a court filing – says that the exchange owes customers approximately $190 million in crypto funds presently held in the company’s offline cold storage. Access to the funds has been encrypted, and it appears Cotton took this information with him to the other side.
Robertson commented:
“Quadriga’s inventory of cryptocurrency has become unavailable, and some of it may be lost.”
The Trip to India
She also claimed that Cotton was in India because he was allegedly “opening an orphanage to provide a home and safe refuge for children in need.”
While the intentions were noble, this still leaves a lot of people in the dark and wondering if they’re ever going to retrieve their money. In addition, this is ultimately the second blow delivered to Quadriga customers in recent weeks after the Canadian Imperial Bank of Commerce (CIBC) previously voted to freeze nearly $30 million in crypto assets held by the exchange after claiming executives were unable to identify the true owners of the funds.
Slander & Death Threats
Robertson, herself, says she played no part in Quadriga, and did not handle any branch of the venture. She has stated she’s been the victim of both slander and death threats over the past several days and claims there has been a barrage of hurtful things posted on Reddit regarding the business, Gerry’s death (i.e. claims that his passing is a hoax), and several missing coins.
She states that while she has her husband’s laptop in her possession, she is unable to open it or access any of its contents. In a court filing, she says:
“The laptop computer from which Gerry carried out the company’s business is encrypted, and I do not know the password or recovery key. Despite repeated diligent searches, I have not been able to find them written down anywhere.”
Things Don’t Add Up
If Robertson is speaking the truth, she certainly deserves some sympathy. It’s not everyday one is dealt a two-sided blow like this. Following the death of a spouse and a trusted friend, she is now faced with the prospect of running a business she likely had no stake in – and assisting lots of angry people.
At the same time, many of the details surrounding Quadriga remain relatively scarce. For example, Robertson claims she has obtained the assistance of an “expert” to try and access the funds, though at the time of writing, the attempts have been unsuccessful. What kind of expert has been retained is presently unknown. Someone who can break encrypted code? A professional hacker? Who’s in charge, here?
A Subreddit has been setup to help people investigate the QuadrigaCX saga and the more you read, the more suspicious all of this becomes.
Additional Problems
Following Cotton’s death, the exchange continued to accept funds until January 26 when operations were paused by the platform’s board of directors. Five days later, the company filed an application for creditor protection with Nova Scotia’s supreme court. At that time, Quadriga had been experiencing months of transaction delays.
The exchange is set for a court hearing later today, February 5. At press time, executives are looking to hire the law firm Ernst & Young to examine the situation further.
An affidavit filed at the end of January shows that there is approximately $92 million in BTC, $1.3 million in BCH, $6.5 million in Litecoin and $46 million in ether tokens stored away in Gerry’s laptop.
