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After the death of QuadrigaCX CEO, $150 million of users’ funds became inaccessible. The exchange will probably be sold to pay the debts.
The name one of Canada’s largest cryptocurrency exchanges QuadrigaCX was being mentioned rather actively in headlines last month when it was revealed that its 30-year-old CEO Gerald Cotten had suddenly died.
As a result, a significant amount of cryptocurrency (roughly $150 million or $180 million Canadian) became inaccessible. To put it mildly, the crypto community was shocked.
How It Can be Solved
Thousands the exchange customers became victims of this unpredictable situation. Nevertheless, lawyers are trying to find the most sensible way to compensate them.
One of the most obvious options to solve the issue is to sell the exchange. But there is one more solution that gives some hope. The encrypted laptop that was used by Cotton will be given to a court-appointed monitor, an independent third party that will investigate the company’s operations during bankruptcy procedures.
It is said that after the death of Cotton this laptop was held by the representatives of the exchange but namely this device might provide access to “frozen” QuadrigaCX customer funds.
QuadrigaCX asked for a 30-day stay of proceedings. This period will end on March 7. The company explained that they need this time to find the key that could provide access to the customers’ funds. Nevertheless, if it doesn’t happen, the lawyers speaking on behalf of QuadrigaCX will consider a variant of selling the exchange to cover the debts.
The financial difficulties have begun for QuadrigaCX after its CEO Gerald Cotten reportedly died of complications from Crohn’s disease in India in December 2018.
Some customers have even expressed suspicion about the trustworthy of this information, nevertheless, they were not right. A death certificate issued by the Government of Rajasthan’s Directorate of Economics and Statistics has recently become publicly available.
According to this document, Gerald William Cotten died on December 9, 2018, and his wife Jennifer Robertson was mentioned in the certificate as his widow.
In January, the widow announced that the CEO hadn’t left passwords to the exchange’s wallets. As a result, there is no access to them. 115,000 customers were deprived of their right to use their fiat and crypto assets.
Though at first glance it may seem that everything is clear about the situation, it is not so, if you try to analyze more details of this case.
First of all, there were some rumors that the company’s co-founder who had reportedly left the company years before might be a scammer known by the name of Omar Dhanani.
Secondly, in October, the bank froze around $22 million of QuadrigaCX funds was frozen due to the fact that it wasn’t possible to prove the real ownership of the money.
Thirdly, some blockchain experts voiced their doubts whether the above-mentioned $150 million in crypto really existed.
The fourth factor that is quite strange is that the exchange was keeping silent for a month after its CEO had died.
And one more thing: Cotten had updated his will less than 2 weeks before he died but there are no signs that he wanted his closest ones to have access to his funds even after his death.