Millions in cryptocurrencies frozen after Canadian founder's death

Cryptocurrency worth $137 million lost after start-up owner who had all the passwords dies suddenly

Canada's leading cryptocurrency exchange company has said it can not repay $190m (£110m) to clients because its founder died with their passwords.

The company announced his death more than a month later, posting on Facebook that 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".

Robertson has access to Cotten's laptop but writes that she is unable to open it.

Bitcoins must be stored on servers and can be kept in "hot wallets", for immediate transactions, or "cold storage" as a sort of digital savings account to protect them from hackers, CBC News reported.

The exchange reportedly owes its customers roughly $250 million CAD ($190 million USD) in both cryptocurrency and fiat.

"For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us", the firm said.

Robertson said she and Quadriga have hired a security expert to try to break the encryption on Cotten's laptop and an encrypted USB key.

Digital-asset exchange Quadriga CX has a US$200 million problem with no obvious solution - just the latest cautionary tale in the unregulated world of cryptocurrencies.

Robertson was not involved in the business.

The exchange's new directors voted to "temporarily pause" the exchange on January 26, according to Robertson. But Robertson provided the court with a copy of Cotten's death certificate, court records show, and Robertson said she and QuadrigaCX's interim chief executive have been hit with threats and "slanderous comments" by angry customers.

"Despite repeated and diligent searches, I have not been able to find them written down anywhere", the affidavit states.

It is noteworthy that the company had also filed for creditor protection on its website. A court hearing is set this week to appoint an independent third-party to oversee the process.

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