Back in late January, the wife of a crypto exchange founder testified that her husband had died without giving out a password that can unlock $137 million worth of crypto assets. Outraged investors are having none of it and are calling for the immediate exhumation of his body to confirm he’s really dead. The story of the founder’s death was first told when an affidavit was submitted stating that he had died from complications of Crohn’s disease. Crohn’s disease is a bowel condition that is rarely fatal, which is part of the reason why investors are up in arms.
On the announcement of his death, investors at QuadrigaCX immediately realised that they had lost control of $137 million worth of crypto assets, because the holding keys were stored on an encrypted laptop. According to the dead founder’s wife, only he (Cotten) had the password that can access the assets. In addition to the lost $137 million worth of assets belonging to 100,000 customers, a further $53 million had also been tied up in disputes with third parties according to investors. The widow, Jennifer Robertson said that she had tried everything to recover the passwords but it all came to nothing. She said that she even hired experts to try and decrypt the computer and even they left empty handed.
A New York Times report showed that the amount of money lost due to QuadrigaCX’s founder’s death is now $250 million. Law enforcement in both Canada- where QuadrigaCX is located- and the US are busy investigating if Cotten- QuadrigaCX’s founder- is really dead. Lawyers representing the company’s outraged clients are now demanding that Cotten’s body be exhumed. They want an autopsy done to confirm if Cotten is really dead and the cause of death. The demand letter sent to Canadian authorities cited “Questionable circumstances surrounding Cotten’s death and the significant losses it has caused. The letter went on to ask that the exhumation be done no later than spring of 2020 because of decomposition concerns.
Investors are also up in arms about the manner in which Cotten’s death was reported. QuadrigaCX did not disclose that he had died until January 14 which is a month after he had reportedly passed away. Their platform then went down with investors unable to withdraw funds. The Supreme Court of Nova Scotia is on the case, as well as the FBI in conjunction with the IRS, the US Attorney for the District of Columbia, and the Justice Department’s Computer Crime and Intellectual Property Section. One of the investigations has shown that QuadrigaCX does not appear to have any basic corporate records. The exchange had also transferred large amounts into Cotten’s personal accounts with other exchanges. We have to wait and see what the results of the exhumation will be, but this scary case goes to show some of the dangers posed by obscure crypto exchanges.
