VANCOUVER, BC — Nearly C$190 million ($145 million) is "lost" after the owner of a cryptocurrency exchange died in December. He was said to be the only one with the password to the digital wallet.
The Independent reported Gerald Cotten, 30, was the chief executive of QuadrigaCX exchange before he died Dec. 9, 2018, in India because of complications from Crohn's disease.
In a blog post, the company said Cotten's death means it is unable to pay customers around C$70 million ($53 million) in bitcoin and other cryptocurrencies. The Independent said various conspiracy theories have surfaced about the whereabouts of the money.
Some customers even took to social media demanding proof of Cotten's death and questioning how he could be the only person with the ability to access the digital wallet of millions.
Bloomberg reported Cotten had always been "conscious about security." The publication said the laptop, email addresses and messaging systems he used to run QuadrigaCX were encrypted. An affidavit from his widow, Jennifer Robertson, said Cotten "took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, to avoid being hacked, moved the 'majority' of digital coins into cold storage," Bloomberg said.
Cold storage digital wallets are not connected to the internet and are accessible only to people who know the private keys or passwords.
Robertson said she can't find his passwords or any business records for the company, Bloomberg said.
When experts were brought in to try to hack into Cotten's computers and phone, they found "limited success." Any attempts to get around the encrypted USB key haven't worked.
In a message on the company's website, QuadrigaCX's board of directors said it has asked the Nova Scotia Supreme Court for creditor protection while they attempt to sort out "significant financial issues."
Cryptocurrency firm ZeroNonsense said in its summary of findings on Monday that "it appears that there are no identifiable cold wallet reserves for QuadrigaCX" and "it does not appear that QuadrigaCX has lost access to their Bitcoin holdings."
The firm also said it appears QuadrigaCX used deposits from customers to pay other customers once a withdrawal was requested.
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