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Access to $190 million blocked after founder of cryptocurrency exchange dies, takes password with him

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MONTREAL — Canada’s largest cryptocurrency exchange is seeking creditor protection after it became unable access 190 million Canadian dollars (145 million US dollars) in funds following its owner’s sudden death in December.

QuadrigaCX’s chief executive and co-founder Gerald Cotten died aged 30 from complications with Crohn’s disease on December 9 while he was travelling in India, the Vancouver-based company said on Facebook.

The exchange platform said in a statement that it filed an application for creditor protection on January 31 to the Nova Scotia Supreme Court to “allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers.”

On Tuesday, the company will ask the court to appoint a monitor as an independent third party to oversee the proceedings.

In an affidavit seen by Canadian media, Cotten’s widow and estate executor, Jennifer Robertson, said she was unable to access the funds.

“The laptop computer from which (Gerald) carried out the company’s business is encrypted and I do not know the password or recovery key,” the Vancouver Sun quoted Robertson as saying.

According to the court filings, since Cotten’s death QuadrigaCX’s employees have been unable to locate or access roughly 190-million-dollars worth of digital money.

“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,” the company said referring to cryptocurrency wallets, similar to USB keys, that are used as storage to keep coins safe from hackers.

“Unfortunately, these efforts have not been successful,” the company wrote.

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