Some $190m of cryptocurrency belonging to a cryptocurrency exchange company cannot be accessed following the death of the CEO.
Gerald Cotten, 30, reportedly died from complications arising from Crohn’s disease while in India opening an orphanage. Cryptocurrency belonging to investors in his firm Quadriga CX was stored by Cotten in cold wallets, offline cryptocurrency storage that is theoretically impermeable to hackers.
Although the storage hardware has been recovered, including four laptops, four mobile phones and three fully-encrypted USB keys, without the passwords, known only to Cotten, they cannot be accessed.
Jennifer Robertson, identified as Cotten’s widow, said: “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 and diligent searches, I have not been able to find them written down anywhere.”
Data retrieval experts have also so far been unsuccessful in accessing the money.
Auditors Ernst & Young have been appointed to monitor proceedings in a creditor protection case. In a further twist they have recently submitted their first report, revealing that Quadriga CX has erroneously sent a further £360,000 to inaccessible cold wallets since Cotten’s death.
Their statement says: “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately CAD $468,675 to Quadriga cold wallets which the Company is currently unable to access.
“The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible.”
Jennifer Robertson says she has received threats and slanderous comments from investors who are angry and suspicious. Quadriga CX announced Cotten’s death on Facebook on 14 January 2019, stating that he had died on 9 December. He reportedly signed a will on 27 November.
Robertson says that Cotten for the most part ran the business from their home in Fall River, Nova Scotia, using an encrypted laptop. Investigations have revealed that there was no discernible accounting system, no tracking of payments made and no bank account.
Investors have also queried why one individual had sole access to such vast sums of money.
Do you think the cryptocurrency can ever be retrieved? How should cryptocurrency investors protect their assets while still allowing others to access them in the event of their death or incapacity?
