Angry investors are demanding answers after a Canadian crypto CEO died without sharing one vital password.
Gerald Cotten — known as “Gerry” to friends — was the founder of Quadriga CX, which launched in 2013.
But the 30-year-old died due to complications from Crohn’s disease in December 2018 during a visit to India, where he planned to open an orphanage for needy kids.
This story is bonkers, my dudes. A crypto CEO dies suddenly, unexpectedly. He takes the keys to appx. $200 mil in crypto with him to the grave. Is he really dead though?? I tracked down an old friend of his. #GeraldCotten https://t.co/FTW33v8xCS
— Alissa Fleck (@AlissaFleck) February 4, 2019
Mr Cotten, who was notoriously concerned with security, was the only person in his company with access to the password needed to transfer most of his clients’ money.
According to his widow Jennifer Robertson, he had “sole responsibility for handling the funds and coins”.
Now, C$190 million ($AU200 million) in digital tokens such as Bitcoin, Litecoin and Ether is unable to be accessed from the company’s “digital wallets”.
A message posted to the company’s website by the board of directors late last month revealed the depth of the ”significant financial issues” plaguing the start-up.
“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 statement reads.
The thing is, their story about how he died is a bit fishy. He was only 30, and they’re saying he died from complications due to crohn’s disease while opening an orphanage in India. A lot of people are finding this hard to believe.
— Adam (@ChalicothereX) February 4, 2019
“Unfortunately, these efforts have not been successful.”
An application for creditor protection was filed in the Nova Scotia Supreme Court on January 31, and experts have been sought to hack the system and free the tokens, with “limited success”.
In the court filing, Ms Robertson said Quadriga CX’s access to crypto had been “severely compromised” by her husband’s death.
“After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost,” Ms Robertson said, according to Bloomberg.
According to CoinDesk, more than 115,000 customers have been left out of pocket.
But some people smell a rat, with several Twitter users claiming Mr Cotten faked his own death.
— Chetan Phull (@SmartblockLaw) February 4, 2019
Some claim several outgoing transactions had been made from QuadrigaCX addresses after Mr Cotten’s death on December 9, which would be impossible if the company’s claims are correct.
The company paid tribute to Mr Cotten in a statement regarding his death, posted on Facebook on January 15, describing him as a “visionary leader who transformed the lives of those around him”.
“Gerry cared deeply about honesty and transparency — values he lived by in both his professional and personal life,” the statement reads.
“He was hardworking and passionate, with an unwavering commitment to his customers, employees, and family.”
Cryptocurrency website ICO Ranker claims Ms Robertson has received death threats
The site contacted Mr Cotten’s friend Freddie Heartline, who rubbished claims he was involved in a scam.
“He was actually a really great guy,” Mr Heartline said.
“Everyone always assumes the worst when they don’t know anything.”
The site also acknowledged claims that Mr Cotten had updated his will less than two weeks before his death, a rumour which has run wild on social media.
According to that claim, Mr Cotten named his wife as the sole executor of his will, and left a staggering $100,000 ($AU105,000) for his two dogs.
The company has sought creditor protection to stop any legal action while it sorts out its finances.