Crypto exchange can't repay customers due to sudden death of founder

QuadrigaCX News Canadian Apex Court Appoints Ernst & Young Inc. to Investigate Into the Lost Funds

Researchers at Zerononcense have also claimed they have traced cryptocurrency transfers from at least 31 customer wallets to company-owned accounts. This one concerns a deceased CEO, lost passwords and almost $150 million of digital coins that could be locked away forever.

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.

Elsewhere, it's now being reported that QuadrigaCX may sell the company if they're unable to settle their debts after a 30-day stay of proceedings, while the encrypted laptop is now in a possession of a court-appointed lawyer.

The online exchange launched in December 2013 and the platform allowed its users to deposit cash or cryptocurrency with Quadriga.

In a case reminiscent of the MMM saga, Canada's leading cryptocurrency exchange company has said it can not immediately repay customers' $190m because its founder died with their passwords.

On Thursday, Quadriga filed for creditor protection in the Supreme Court of Nova Scotia, saying Cotten was the sole officer and director of the company and most of the business was conducted from his laptop wherever he happened to be located.

Canadian entrepreneur Gerald Cotton died due to Crohn's disease while travelling in India in December and was the only person with access to the wallets.




Its possible that the key to unlocking QuadrigaCX's cold storage system could be contained within the company's business documents, which may have a description and record of its systems. Based on company records, she said the cold wallet stored $180 million in Canadian dollars ($137 million in U.S. dollars), all of which is now inaccessible to QuadrigaCX and more than 100,000 customers.

Another wrote in French: "I have sent lots of emails, but I just get automatic responses, I'm not even able to get my crypto out".

"Without access to the Affected Funds, Quadriga was unable to satisfy withdraw requests of users resulting in significant delays for users receiving funds from Quadriga", it said in the application.

The company is also investigating whether some of the cryptocurrency could be secured on other exchanges, according to court files.

She said all attempts to bypass its encryption, including hiring a technical expert, have proved futile. You simply sign into the exchange, trusting that it will secure your funds.

The company could have access to about $30 million in bank drafts, but regular financial institutions have made it clear they are nervous about handling those funds, Chiasson told the court.

Users have been complaining about "withdrawal issues and a lack of communication" from QuadrigaCX for months, Coindesk said. As well, she said she has received online death threats.

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