The real dangers of investing in cryptocurrency have come to light, in a tragic way. Canadian cryptocurrency exchange QuadrigaCX was founded by the now late, Gerald Cotten. His sudden passing has left $190 million in cryptocurrency and other currency inaccessible due to no one else having his passwords.
In December 2018, 30-year-old Gerald Cotten had apparently been traveling in India to open an orphanage, when the cryptocurrency founder suddenly passed away due to reported complications from Crohn’s disease. After his passing, it has now come to light that he was the only one in possession of passwords for the company’s “cold storage”, which holds $190 million in cryptocurrency and other currency, which the company is now unable to access.
In a sworn affidavit filed on 31 January 2019 in the Nova Scotia Supreme Court in Canada made by the founder’s widow, Jennifer Robertson, claims that the company owes its customers roughly $190 million in cryptocurrency and other currency. According to the affidavit, the cryptocurrency exchange holds the following:
Roughly 26,500 bitcoin ($92.3 million), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million.
The rest of the roughly $190 million in funds that are currently inaccessible, consist of other forms of currency, according to the affidavit.
The affidavit goes on to explain that no one else, except the deceased, had the passwords to the “cold storage”. It notes that other members of the company’s board had hired specialists to try to open the “cold storage” but that their attempts have, thus far, been unsuccessful.
The affidavit was filed as part of an urgent court application filed by the board members of the cryptocurrency exchange, to prevent the company from being sued. The company is preempting lawsuits due to the current predicament it finds itself in. It has requested that the court stay any proceedings against the company, to allow the board members time to figure out a way to access the funds.
Users have been complaining about issues regarding withdrawals of funds for a while. The website is currently down due to “maintenance”.
The tragic dilemma which this company finds itself in, could be a massive deterrence for consumers who might already be wary to invest in such a volatile currency. This isn’t the first time that lost passwords caused a potentially huge loss of funds. Last year, billionaire Matthew Mellon passed away without leaving details behind of his passwords to his billion dollar cryptocurrency fortune. Bill Gates has also repeatedly warned that cryptocurrency is “super risky”.