Cryptocurrency Owners Can’t Access Funds After Exchange CEO Dies—Because No One Knows the Password
The founder of Canadian crypto exchange QuadrigaCX took security seriously. Users’ cryptocurrency wallets were kept offline, ensuring hackers couldn’t get at them. And he was the only one who had the password.
Then he died. And now, customers who have $190 million in cryptocurrency stores with the company, wonder if they’ll ever see their investment again.
Gerald Cotten, who owned QuadrigaCX, died in December. And his widow says she does not know how to access the cold storage facility, where the roughly 26,000 Bitcoin, 11,000 bitcoin cash, 200,000 Litecoin, over 400,000 Ether and other cryptos are not kept on a public computer.
“The laptop computer from which Gerry carried out the Companies’ business is encrypted and I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere,” said Jennifer Robertson, Cotten’s widow, in an affidavit.
QuadrigaCX, at a court hearing set for Tuesday, is expected to ask a judge to appoint Ernst & Young as an overseer for its financial issues.
“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,” the company said via a statement on its website. “Unfortunately, these efforts have not been successful.”