Crypto boss dies with passwords needed to unlock millions of dollars from customer accounts
Customers of a Canadian cryptocurrency exchange are reportedly unable to access $190 million of funds after the company’s founder died with the passwords needed to access the money.
Lawyers representing users of the collapsed QuadrigaCX cryptocurrency exchange want Canadian authorities to exhume the body of the company’s founder amid ongoing controversy over the firm’s demise.
Gerald Cotten, the 30-year-old founder of QuadrigaCX, died in India on Dec. 9, 2018, due to complications from Crohn’s disease, according to a sworn affidavit by his wife following his death. Cotten’s body was reportedly brought back to his native Canada for burial.
At the time of his death, Cotten was the only person with the passwords to access the customers' funds. In the turmoil following Cotten’s death, QuadrigaCX sought creditor protection in the Nova Scotia Supreme Court.
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Cotten’s death left customers unable to access more than $160 million in funds and controversy still swirls around the company and its founder. Court-appointed monitor Ernst & Young, which is overseeing the bankruptcy proceedings, has been investigating the company's collapse.
Gerald Cotten (Facebook)
In a letter sent to the Royal Canadian Mounted Police on Dec.13, law firm Miller Thomson asked authorities to “conduct an exhumation and post-mortem autopsy on the body of Gerald Cotten to confirm both its identity and the cause of death given the questionable circumstances surrounding Mr. Cotten’s death and the significant losses of Affected Users.”
Lawyers also submitted what they described as publicly available information on Cotten and Quadriga that “in our view, further highlight the need for certainty around the question of whether Mr. Cotten is in fact deceased,” according to the letter.
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Cotten's widow Jennifer Robertson is "heartbroken" by the request, according to her lawyer Richard Niedermayer.
"My client, Jennifer Robertson, the wife of the late Gerald (Gerry) Cotten and executor of his estate, is heartbroken to learn of this request," explained Niedermayer, a partner at Stewart McKelvey, in a statement emailed to Fox News. "Gerry died on December 9, 2018 in India – an independent investigation by the Globe & Mail confirmed this earlier this year, and it should not be in doubt. While Ms. Robertson has assisted the Quadriga Affected Users in the recovery of assets, and has cooperated fully with Ernst & Young’s investigation, it is not clear how the exhumation or an autopsy to confirm the cause of Gerry’s death from complications arising from his Crohn’s disease would assist the asset recovery process further.
The Royal Canadian Mounted Police declined to comment when contacted by Fox News. “As this matter is under investigation we cannot answer any of your questions,” a spokeswoman said, in an emailed statement.
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A report released earlier this year by Ernst & Young alleges that Cotten siphoned off money from the firm’s customers before his death.
“Mr. Cotten created identified accounts under aliases where it appears that unsupported deposits were deposited and used to trade within the platform resulting in inflated revenue figures, artificial trades with users and ultimately the withdrawal of cryptocurrency deposited by users,” said the report. “Substantial funds were transferred to Mr. Cotten personally and other related parties.”
Citing data from Quadriga’s database, Ernst & Young reported that, at the time of its bankruptcy filing, the company owed 214.6 million Canadian dollars ($163 million) to its customers.
Initial media reports indicated that Quadriga owed $190 million to customers, but Ernst & Young said it obtained more refined data on the company’s financials as a result of the bankruptcy proceedings, which was handed over to the Nova Scotia Supreme Court.
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Ernst & Young reported that 33 million Canadian dollars ($25 million) owed to customers has been recovered.
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