QuadrigaCX, the most important virtual currency trading platform in Canada, has 250 million dollars of its clientele – both in the Canadian currency and in bitcoins and other cryptocurrencies – fully protected. The problem is that not even the company itself is able to access these funds, since its founder and executive director took the password to the grave. QuadrigaCX has until March 7 to resolve this issue. Otherwise, the demands will come as the drops of a storm.
The platform was created in 2014 by Gerald Cotten, a Canadian born 30 years ago in the province of Nova Scotia. On January 14, QuadrigaCX announced on Facebook the surprise death of its founder and CEO. "Gerry died due to complications of Crohn's disease on December 9, 2018, while he was traveling in India, where he was opening an orphanage to provide home and safety for children," the publication said.
On January 31, QuadrigaCX informed its clients that it had filed with a court in the city of Halifax (Nova Scotia) a request for 30-day suspension of payments, in order to resolve financial problems. The company had already had liquidity difficulties at the beginning of 2018, when the CIBC bank froze 26 million due to irregularities in certain transfers. However, it was a discrete figure compared to the one that was coming.
In an affidavit before the court, Jennifer KM Robertson, widow of Gerald Cotten, said the company could not access $ 250 million – in the Canadian currency and in cryptocurrencies – belonging to some 115,000 customers, since her husband was the only person who knew the password. According to Robertson's statement, Cotten feared the hackers. For this reason, he deposited the money in an electronic purse disconnected from the internet and protected by the secret code. Robertson said that several experts tried to enter the laptop that Cotten used to run the company, as well as his mobile phone and an encrypted USB device. However, the efforts to find the password of the electronic purse were unsuccessful.
On February 5, the judge admitted the request submitted by QuadrigaCX, authorizing the suspension of payments that will be rendered ineffective on March 7, the company's deadline for accessing the e-wallet, either by finding the password or when finding a way to restart it. The firm Ernst & Young will manage the cryptocurrency company's finances during that time. "This suspension of payments allows us to work diligently in this process and thus try to ensure the viability of our company," said QuadrigaCX the day the judge's decision was announced. However, the company's lawyers pointed out in court that if the password could not be found, the platform could be put up for sale to cover the debts.
The particularities of this history have provoked numerous speculations. The one that sounds with more force is that Cotten escaped, in a studied plan, with the millionaire resources. According to The Globe and Mail, the founder of QuadrigaCX wrote his will 12 days before his death, where he named his wife as sole heir. However, Robertson presented Cotten's death certificate. In addition, the Canadian Ministry of Foreign Affairs confirmed to CBC that one of its citizens died in India, although it did not provide further details due to the guidelines of the law for the protection of personal data.
For now, QuadrigaCX is in a race against the calendar to find the key. It is not known if the company will summon famous hackers or spiritualists of wide trajectory in their attempts. The Canadian media has taken advantage of this case to ask the authorities for more controls in the purchase and sale of cryptocurrencies.