QuadrigaCX granted creditor protection - but did it ever actually have $145 million?

11 February, 2019, 14:10 | Author: Brooke Harris
  • $145M Locked Away After Crypto Exchange Boss Mysteriously Dies

In the beginning of February - following the sudden death of its 30-year-old founder Gerald Cotten - it was reported that QuadrigaCX is missing CA$190m ($145m) in digital assets.

Highlighting the risks in the poorly-regulated cryptocurrency market, the death of entrepreneur Gerald Cotten in India who was the owner of Canada's biggest cryptocurrency exchange Quadriga has left thousands of his investors in a quandary.

The company had 363,000 registered users, of which 92,000 have account balances owing to them in cash or cryptocurrencies, Bloomberg reported, quoting court filings.

According to Jack Julian of the Canadian Broadcasting Corporation (CBC) who covered the proceedings at length, QuadrigaCX lawyers expressed hope that a stay of proceedings would allow the company to recover the lost funds "to the extent that they exist".

"I do not know the password or recovery key", she said.

Things became even more suspicious after it was revealed that Cotten had filed his last will and testament just 12 days before he died, in which he designated his wife has his only beneficiary as well as the executor of his estates.

In an application to probate the will, filed on December 21, 2018, Robertson confirmed that the gross value of Cotten's personal property - all of which was left to her - was $9.6 million. "The information of his death was communicated to the relevant authorities".

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However, a death certificate circulating online - ostensibly issued by the Directorate of Economics and Statistics in the Indian city of Jaipur- "proving" that indeed the QuadrigaCX founder is dead.

There was also a plan in place to provide $100,000 to Cotten's in-laws to help them cover the costs of caring for the couple's pet Chihuahuas, Nitro and Gully.

QuadrigaCX made headlines after major news media outlets covered that users were not able to withdraw their funds after the CEO mysteriously "died" while on a trip to India. The cause of death is not listed.

Robertson said Cotten was diagnosed with Crohn's disease at the age of 24, about a year after he co-founded QuadrigaCX with his partner Mike Patryn. The certificate, which IndiaToday.in has been unable to verify, is dated December 13 and says that one "Gerald William Cottan" died at the Fortis Escorts Hospital, located in Jaipur's Malviya Nagar. Moreover, as per British Columbia Securities Commission, QuadrigaCX is unregulated and there is no evidence of it operating as an exchange or trading securities.

The Canadian Securities Administrators [CSA], the watchdog of provincial security regulators, said that there were no cryptocurrency trading firms that have been regulated as a trading platform by security regulators.

The British Columbia Securities Commission issued a statement Thursday saying it has been aware of QuadrigaCX's operations since 2017.

The CEO's widow Jennifer Robertson has also said that she doesn't have access to any of these accounts and that the laptop, which Cotten used for the exchange, is encrypted.

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