Crypto trader boss dies with password to clients’ £110m

Coinbase Crypto Cold Wallet

Cryptocurrency exchange loses $145 million after CEO takes passwords to the grave

Digital-asset exchange Quadriga CX has a US$200 million problem with no obvious solution - just the latest cautionary tale in the unregulated world of cryptocurrencies.

"Cold storage", for the uninitiated, refers to offline wallets used to safely store large amounts of cryptocurency (connected, or "hot", wallets are more vulnerable to hackers).

Gerald Cotten, 30, died of complications with Crohn's disease while doing philanthropic work in India in early December, according to a post on QuadrigaCX's Facebook page.

What was the password again?

Robertson said she was not involved in Cotten's business while he was alive and did not know the password or recovery key.

Robertson was not involved in the business.

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"Despite repeated and diligent searches, I have not been able to find them written down anywhere", she said.

The exchange reportedly owes its customers roughly $250 million CAD ($190 million USD) in both cryptocurrency and fiat.

"After Gerry's death, Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost", Robertson said, adding that the company's access to currency has been "severely compromised" and the firm has been unable to negotiate bank drafts provided by different payment processors.

Robertson said the exchange's new directors voted to "temporarily pause" the platform on January 26. Discussion boards on Reddit are peppered with skeptical comments about the company's efforts to work out its issues, and some users say they have upward of $80,000 or $100,000 that has been locked away from them. "I would probably avoid [cryptocurrency] in the future", Cavalic said. After not being able to withdraw CA$15,000, he said, "They've left us completely in the dark".

That's not all the trouble for the Canadian company either, which has since filed for creditor protection in the Nova Scotia Supreme Court.

The company is also investigating whether some of the cryptocurrency could be secured on other exchanges, according to court files. Robertson said the many types of deposits made it hard for the company to stop the inflow of money - even as it lost its ability to access or disburse funds.

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