Canadian cryptocurrency exchange QuadrigaCX seeks creditor protection after founder's death

Coinbase Crypto Cold Wallet

Coinbase Crypto Cold Wallet

In an affidavit, the widow of Gerald Cotten, Quadriga's founder, CEO and sole director, said he died suddenly on December 9 due to complications from Crohn's disease.

A "cold wallet" is a physical data storage device that is not connected to the internet.

Jennifer Robertson, the widow of the deceased founder, suggests that Cotten was the only person in the firm to have access to funds and cold wallets and no other person had any knowledge of the same.

As customers panicked and tried to withdraw their funds, QuadrigaCX went off the grid.

A common practice among cryptocurrency exchanges is to store customers' coins in cold wallets, which are offline and encrypted and can only be accessed by those who know the password.

Robertson has access to Cotten's laptop but writes that she is unable to open it. The company had no corporate bank accounts and used third party services to manage payments and withdrawals.

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'[This includes] 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.

The company hired an investigator to see if any information could be retrieved but ongoing efforts have had only "limited success in recovering a few coins" and some information from Cotten's computer and phone.

Cotten reportedly died in December at the age of 30.

Canadian crypto exchange QuadrigaCX owes its customers about $190 (249 million Canadian dollars). The Ontario Superior Court of Justice took control of the funds, Coindesk reported, and they were just returned to the company days before Cotten's death.

To try and buy time to access the laptop and possibly to liquidate the company, QuadrigaCX has applied for a stay of proceedings from the Supreme Court.

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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