This crypto exchange owes its customers millions, but only the founder has the password — and he's dead

Cryptocurrency experts have raised significant questions about the the company's version of events — including whether or not the founder is really dead.
February 5, 2019, 2:24pm
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Canada’s biggest cryptocurrency exchange claimed Monday it cannot pay back $190 million in customer deposits because its founder died suddenly and didn’t tell anyone his password.

Representatives for Quadriga CX will appear in court Tuesday looking for creditor protection following the death of 30-year-old Gerald Cotten in India in December.

However, cryptocurrency experts and the company’s customers have raised significant questions about Quadriga’s version of events — including whether Cotten is really dead.


The company says it owes customers CAD$180 million worth of cryptocurrencies such as bitcoin, litecoin and ethereum, along with CAD$70 million in fiat currency. But it cannot access its funds because they are stored in “cold wallets” that only Cotten could access.

According to an affidavit filed by Cotten’s wife, Jennifer Robertson, Quadriga had 115,000 customer accounts in December. It's been reported that one customer alone had deposits worth CAD $70 million.

Cold wallets are stored offline for increased security and to protect them from hacking. Adding to the confusion, the laptop used by Cotten to conduct his business is encrypted and also cannot be accessed.

According to the company’s Facebook page, Cotten died on Dec. 9 “due to complications with Crohn's disease while traveling in India, where he was opening an orphanage to provide a home and safe refuge for children in need.”

Cotten’s death was only made public a month after he passed away.

There had been signs of problems at the company throughout 2018 after a Canadian bank froze the exchange’s assets. Customers complained about delayed withdrawals of fiat currency, and by December, payouts had effectively ceased.

Even attempts to withdraw crypto assets, which should be instant, had slowed.

Robertson was the executor of Cotten’s will, which he signed just two weeks before he died. As well as leaving the majority of his estate to his wife, he also left CAD$100,000 to take care of his two dogs.


In an affidavit filed Jan. 31, Robertson, who was not involved in the day-to-day running of the company, presented a death certificate as proof that her husband died.

“There has been a significant amount of commentary on Reddit and other web-based platforms about the state of Quadriga, Gerry’s death (including whether he is really dead), and missing coins,” Robertson said.

While Reddit, Twitter and Telegram are awash with angry customers spreading conspiracy theories, they aren't the only ones raising doubts.

Cryptocurrency experts have also dug into the claims made by Robertson in her court filing, and a number have highlighted worrying discrepancies.

One technical analysis, which looked at publicly available data on transactions from the exchange, suggests there are no cold wallets and that the company “was using deposits from their customers to pay other customers once they requested their withdrawal.”

READ: Ryan Zinke says he’s now trying to make a cryptocurrency company “great again”

The analysis, written by a group of cryptocurrency experts that publish on the Zerononcense blog, claims that the company has not lost access to its stash of bitcoin, pointing out that transactions appear to have occurred after Cotten’s reported death.

Other experts have similarly concluded that the situation as outlined in the affidavit is not accurate.

There is further evidence from the company’s own Twitter account, which tweeted a response to a customer on Jan. 21 that bitcoin transactions were taking place at a time when they claimed not to have had access to their private keys.

Cover Image: The Bitcoin logo is seen on a portable mobile device in this photo illustration on January 22, 2019. (Jaap Arriens/NurPhoto via Getty Images)