Crypto exchange founder dies with sole password, leaving $190 million locked up

stock photo of bitcoins and U.S. dollar bills
David McBee/Pexels

The death of a crypto exchange founder has rendered the exchange unable to repay $190 million to its clients.

When QuadrigaCX founder Gerald Cotten passed away in December 2018, the exchange lost access to the funds required to pay back its customers the $190 million it owes them.

QuadrigaCX lost access to these funds because the password required to access them wasn’t known to anyone except Cotten himself.

As a result, the Canadian crypto exchange has filed for “creditor protection” in an attempt to avoid bankruptcy, according to CoinDesk.

Apparently the password-protected funds are kept in “cold storage” and the only funds available to QuadrigaCX are stored in a “hot wallet.” The exact amounts of money stored in either the cold storage or hot wallet are currently unknown, although it seems that the bulk of the money needed to repay Quadriga’s customers is being held in cold storage.

Cotten’s widow, Jennifer Robertson shed a little light on how the funds were normally handled, via a sworn affidavit filed last month with the Nova Scotia Supreme Court. In the affidavit, Robertson said that Cotten “would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”

While Robertson does not have business records for QuadrigaCX, she did get Cotten’s laptop. Unfortunately, she has been unable to access the contents of the encrypted laptop, as no one has the password or recovery key for it. Attempts to decrypt the laptop have not been successful.

115,000 customers (with balances) could be affected by QuadrigaCX’s inability to pay the $190 million. Not to mention the roughly $50 million in fiat the exchange also owes. According to that same affidavit, the exchange is supposed to have $147 million in total.

Quadriga’s customers have reported being unable to withdraw their funds from the exchange for months and have complained about this and about receiving little information about the status of their accounts and about the fact that Quadriga’s website went down for maintenance last week.

Selling off Quadriga’s operating platform has been mentioned as an option for the exchange, as doing so may allow it to help pay its customers back.

Selling off the operating platform may not help matters much if the troubled crypto exchange is unable to secure a court hearing on February 5 that confirms a “stay of proceedings.” Such a stay could stop lawsuits against the exchange from going forward and would be expected to prevent “further damages” to Quadriga’s customers, according to Robertson’s affidavit.

Product Review

Audio-Technica's M50xBT headphones bring signature studio sound to the streets

Audio pros may balk at cutting the cord on studio headphones, but it’s hard to argue with these results. Audio-Technica’s wireless ATH-M50xBT offer massive battery life and killer sound you can take anywhere.
Emerging Tech

Asteroid Ryugu is porous, shaped like a spinning top, and is formed of rubble

The Japanese Space Agency has been exploring a distant asteroid named Ryugu with its probe, Hayabusa 2. Now the first results from study of the asteroid are in, with three new papers published.
Photography

Sony’s latest sensor is stacked, backlit, and equipped with a global shutter

Say this five times fast: Backlit, stacked, global shutter sensor. Sony managed to cram all three technologies into one sensor. The result is a high-speed sensor with a higher resolution without sacrificing low-light quality.
Computing

Intel and Facebook team up to give Cooper Lake an artificial intelligence boost

Intel's upcoming Cooper Lake microarchitecture will be getting a boost when it comes to artificial intelligence processes, thanks to a partnership with Facebook. The results are CPUs that are able to work faster.
Computing

Get ready to say goodbye to some IFTTT support in Gmail by March 31

If This Then That, the popular automation service, will drop some of its support for Gmail by March 31. The decision comes as a response to security concerns and is aimed to protect user data.
Computing

Get the new Dell XPS 13 for $750 with this limited-time deal

Dell is currently running a limited time deal lasting through Thursday, March 28, where you can bring home a version of this year's new XPS 13 for around $750 with the use of a special coupon code. 
Computing

Nvidia faces attacks from AMD, Intel, and even Google. Should it be worried?

Nvidia announced an expanded array of RTX server solutions designed to leverage the power of ray-tracing at GTC 2019. The effort will help Nvidia take on Google's Stadia in game streaming with GeForce Now, and the company's investments in…
Mobile

This is the easiest way to save your iPhone data to your computer

Living in fear of losing your contacts, photos, messages, and notes on your iPhone? Fear no more -- in this guide, we'll break down exactly how to back up your iPhone to your computer using Apple's iTunes or to the cloud with iCloud.
Mobile

Here are the best iPad Pro keyboard cases to pick up with your new tablet

The iPad Pro range can double as laptops, but they do need proper keyboards to fill in effectively. Thankfully, there are loads to choose from and we rounded up the best iPad Pro keyboard cases right here.
Computing

Microsoft’s Clippy came back from the dead, but didn’t last very long

Before Cortana, Alexa, and Siri even existed, Microsoft Clippy dominated the screens of computers in the 1990s to help assist Microsoft Office users when writing letters. He recently made a bit of a comeback only to die off again.
Computing

How 5G networks will make low-latency game streaming a reality

Faster speeds and more bandwidth are some of the many promises that 5G can deliver, but for gamers, the most important thing is low latency. To achieve low latency, carriers like AT&T and Verizon are exploring hybrid models for game…
Deals

Time to do taxes? Save up to 50 percent on H&R Block tax software this weekend

Tax season is stressful, and with new tax laws in effect this year, it's not a bad idea to get some help. H&R Block has you covered: For two days only, you can save 50 percent on its great software so you can file your taxes online and save…
Computing

Stop dragging windows on your Mac. Here's how to use Split View to multitask

The latest iterations of MacOS offer a native Split View feature that can automatically divide screen space between two applications. Here's how to use Split View on a Mac, adjust it as needed, and how it can help out.
Computing

Breeze through security with these checkpoint-friendly laptop bags

Getting through airport security is a drag, but your laptop bag shouldn’t be. Thankfully, these checkpoint-friendly laptop bags will get you and your gear to your destination with ease.