Cryptocurrency and cash worth more than £100 million is missing after an exchange founder suddenly died on holiday and took his secret passwords to the grave.
The cash and coins were stored in cold wallets for security and the keys on how to access them have disappeared following the unfortunate death of Gerald Cotton, the founder of Quadriga, Canada’s biggest cryptocurrency exchange.
Despite a search, the exchange cannot locate any of the funds or the cold wallets they are stored in.
Cotton, 30, passed away in December after a trip to India. He suffered sudden complications to a long-term illness.
He had taken personal responsibility for handling the exchange’s cash deposits and ran the business from his laptop.
Encrypted computer may hold key
But he does not seem to have left instructions or passwords for anyone else about how to access the money.
Quadriga has filed for bankruptcy protection with creditors seeking around £140 million.
The exchange holds accounts for 115,000 customers as cash and cryptocurrency. About a third of the money – £46 million – is hard currency.
Cotton’s widow, Jenny Robertson has told administrators that the laptop was recovered but is encrypted and that she does not know the password or recovery key despite searching his belongings.
“Despite repeated and diligent searches, I have not been able to find them written down anywhere,” she said.
Private investigator draws a blank
A private investigator also drew a blank when trying to unlock the data.
“An application for creditor protection in accordance with the Companies’ Creditors Arrangement Act was filed in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers,” said a statement from the company.
“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. Unfortunately, these efforts have not been successful.”