A cryptocurrency fund boss died. Investors’ money may be encrypted forever

Did QuadrigaCX lie about its back up wallets in order to liquidate

The online startup can't retrieve about C$190 million (US$145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan 31 in Halifax, Nova Scotia.

Canada's leading cryptocurrency exchange company has said it can not repay $190m (£110m) to clients because its founder died with their passwords.

Gerald Cotten, CEO of QuadrigaCX, died due to complications with Crohn's disease on December 9, while travelling in Jaipur, India, to open an orphanage.

Robertson reportedly doesn't have business records for QuadrigaCX or its affiliated companies, and she doesn't know the password or recovery key for Cotten's encrypted laptop.

Robertson said Cotten, who had "sole responsibility" for the Vancouver-based company's money, stored most of it in "cold wallets" that are not connected to the internet.

In a statement posted online last Thursday, Quadriga said it is working to address its "liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallet".

In a filing Thursday for creditor protection with the Supreme Court of Nova Scotia, Jennifer Robertson, Cotten's widow, said his death left the company unable to access the bulk of its crypto-currency funds, CBC News reported.

QuadrigaCX had been plagued with legal trouble in the past year: In early 2018, the Canadian Imperial Bank of Commerce froze more than US$25m of QuadrigaCX's assets after noticing "irregularities" in the exchange's payment processes.

Quadriga did not have offices or a bank account of its own; in the court filing, Robertson said, "Gerry ran the business through his laptop, mostly at our home, but also wherever he happened to be".

"Despite repeated and diligent searches, I have not been able to find them written down anywhere", the affidavit states.

QuadrigaCX, which filed for bankruptcy protection in the Supreme Court of Nova Scotia on January 31, was created to "simplify the process of buying and selling" the bitcoin cryptocurrency, according to a cached version of its website.

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.

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