On Jan. 31, 2019, Canadian cryptocurrency exchange QuadrigaCX filed for protection in Nova Scotia under the Companies' Creditors Arrangement Act, which allows companies to restructure in order to avoid bankruptcy. According to reports, the company claims that it is unable to repay approximately $190 million owed to approximately 92,000 clients due to the recent alleged death of its founder, 30-year-old Gerald Cotten. Cotten allegedly was the only person who had the private keys needed to access approximately $147 million in cryptocurrency assets held on behalf of the company in off-line "cold storage" accounts. According to the company, Cotten died "due to complications with Crohn's disease on December 9, 2018 while travelling in India, where he was opening an orphanage to provide a home and safe refuge for children in need." A Cointelegraph article claimed that Cointelegraph had obtained a copy of Cotten's death certificate issued by the India Government of Rajasthan's Directorate of Economics and Statistics.
According to Bloomberg, 12 days before his apparent death, Cotten signed a will leaving all of his assets to his wife, Jennifer Robertson, and making her the executor of his estate. Multiple reports have emerged this week questioning whether Cotten's death may have been part of a fraudulent "exit scheme." One report claimed to provide blockchain analysis demonstrating that QuadrigaCX didn't have any cryptocurrency reserves, and suggested that the company was using customer deposits to pay out other customer withdrawals in an apparent Ponzi scheme.
For more information, please check out the following links:
- Crypto Exchange QuadrigaCX Files for Creditor Protection
- Canadian Cryptocurrency Exchange QuadrigaCX Files for Creditor Protection in Nova Scotia
- Crypto Exchange Says It Can't Repay $190 Million to Clients After Founder Dies With Only Password
- Government Death Certificate Says QuadrigaCX CEO Died in India
- Crypto Exchange Founder Filed Will 12 Days Before He Died
- Judge Moves to Block Potential Lawsuits Against QuadrigaCX Exchange
- Is the Missing Crypto From QuadrigaCX's $150 Million Disaster on the Move? Experts Weigh-in
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