Lawyers are lining up at the Supreme Court of Nova Scotia to represent investors who want their money — after QuadrigaCX’s 30-year-old CEO died and took some of the cryptocurrency exchange’s passwords to the grave.
Gerald Cotten died suddenly in India due to complications from Crohn’s disease in December. He created a will 12 days before he died, but didn’t share the passwords for digital wallets containing $190 million worth of bitcoin and other cryptocurrencies with anyone — not even his wife. There is speculation — which has not been proven — that Cotten is not actually dead.
QuadrigaCX remains shuttered and was granted creditor protection for 30-days last week. Ernst & Young was appointed monitor and revealed some startling details about the QuadrigaCX’s current state of affairs in its first report yesterday.
QuadrigaCX has only $902,743 worth of cryptocurrency on its server. It also lost nearly half a million dollars last week.
“On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access,” says Ernst & Young in the court document.
“The monitor is working with Management to retrieve this cryptocurrency from various cold wallets, if possible.”
Lawyers are fighting it out to represent at least 115,000 QuadrigaCX customers who are owed around $260 million dollars.
There is little in the way of regulatory oversight when it comes to crypto currency exchanges, but regulators are concerned.
“Given the potential harm to Ontario investors, we are looking into this matter and have already been in contact with the monitor,” the Ontario Securities Commission told Yahoo Finance Canada.
Other Canadian crypto exchanges are in damage control mode. Coinsquare is waiving fees on e-transfers starting today until February 28, 2019 for all of its users.
“We know that the recent news in the Canadian cryptocurrency space has been disappointing. When bad things happen in our industry, we believe that it affects everyone,” Says Coinsquare in an email to its customers.
“We’re confident about the future of digital currency and remain committed to making things better for those in our community.”
The next court date is set for February 22nd.