About $C180 million ($190 million) in cryptocurrencies have been frozen in the user accounts of Canadian digital platform Quadriga after the founder - the only person with the password to gain access - died in December. According to a research piece from a leading industry researcher, QuadrigaCX, a Canadian Bitcoin (BTC) exchange in the midst of a multi-month imbroglio, could have been fibbing about its cryptocurrency holdings - and by a large sum at that.
A common practice among cryptocurrency exchanges is to store customers' coins in cold wallets, which are offline and encrypted and can only be accessed by those who know the password.
The report further suggested that Gerald Cotten died of Crohn's disease in Jaipur, India in December 2018, following which the company made his death public earlier in January.
What was the password again?
"I do not have any documents or records" for the business, Robertson added, saying that she had searched the couple's home in Fall River, Nova Scotia, and other locations but had found nothing.
According to a court filing first reported by CoinDesk, a cryptocurrency news and events company, Jennifer Robertson, identified as Cotten's widow, said the exchange owes its customers roughly C$250 million (US$190 million) in cash and cryptocurrency held in its "cold storage". The company's stance has gone from "Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost" to "most, if not all" of their customers will suffer damages. "I would probably avoid [cryptocurrency] in the future", Quadriga user Elvis Cavalic of Calgary, Alberta, told the CBC news agency.
The laptop that Cotten used to move funds between cold wallets and hot wallets is encrypted and locked - leaving the exchange paralyzed after Cotten's death, Robertson said. "They've left us completely in the dark".
Robertson said in her affidavit she has received online threats and "slanderous comments", including questions about the nature of Cotten's death, and whether he is really dead.
Robertson said Quadriga would consider selling its cryptocurrency platform as an option to fulfill its obligations to customers and creditors.