QuadrigaCX cryptobirds will not give away $ 137 million. Only the director knew the password for the vault, and he died.
QuadrigaCX, a Canadian crypto currency, owed customers $ 190 million, but users are unlikely to see much of that money. The fact is that only one person had access to the cold storage - the director. And he suddenly died. The CoinDesk publication has published legal materials on the lawsuit against QuadrigaCX . According to the written testimony of the widow of the deceased, Jennifer Robertson, her husband Gerald Cotten owed customers about 250 million Canadian dollars (about $ 190 million) in cryptocurrency and Fiat.
In the illustration: the balance of the QuadrigaCX exchange on January 18, 2019 (only cryptocurrency assets are listed, not including Fiat in the accounts)
At the time of closing, approximately 115,000 users were registered on a crypto-exchange. Their accounts contained about 70 million Canadian dollars in Fiat and about 180 million in cryptocurrency, including more than half in Bitcoins - about 26,500 Bitcoins ($ 92.3 million at the rate).
On January 31, the Board of Directors filed an application. for protection against creditors as part of the bankruptcy procedure, but additional details of this story became known from the testimony of the widow. In particular, it became known how much of the assets are kept in a hot wallet, and which in a cold storage.
Miss Robertson said under oath that there was only a minimal amount of coins in the hot wallet: another virtual theft. "
It must be admitted that Cotten has thoroughly approached the protection of information. Cold storage is not hacked during his lifetime and can not hack now.
Jennifer Robertson added that Cotten was “solely responsible for handling funds and coins,” while the rest of the staff did not have access to the cold wallets of the exchange. Although she admitted that some of the QuadrigaCX funds are stored on other exchanges, this has not yet been proven.
As previously reported, Cotten died of Crohn's disease in Jaipur, India, in early December 2018. The stock exchange announced his death only in early February, attaching a death certificate to the official statement on the website in order to convince the most suspicious customers.
The widow said that she did not have any husband's business records for QuadrigaCX or affiliated firms. Although there is Kotten's laptop, but the device is encrypted, and it does not have a password or recovery key.
After the founder’s death, the company hired an information security consultant who tried to restore the contents of the laptop, but so far his efforts have not been successful.
The lack of a password for cold storage is not the only problem of cryptobirds. The fact is that access to fiat assets of clients is also temporarily lost due to legal claims by the Canadian Imperial Commercial Bank (CIBC). For this reason, the payment processor Billerfy can not now transfer funds to the exchange.
Billerfy accounts for about 30 million Canadian dollars, that is, the lion's share of all cash. Another payment operator called WB21 holds another 9 million Canadian dollars and 2.4 million US dollars, but at the moment "refuses to release funds or respond to messages from Quadriga," the court testimony says.
WB21 operator PR manager Ralph Muller saysthat "WB21 does not confirm the correctness of the balance sheets mentioned in the court testimony, and given the current legal situation of Quadriga, our team for compliance with regulatory requirements of the law is forced to restrict access to accounts until the investigation is completed." At the same time, a case is also being considered with regard to the processing company: it is accused of fraud in connection with a different story.
Responding to questions from the court, Miss Robertson confirmed that users continued to deposit funds into the accounts of the exchange after the death of Cotten, and the exchange accepted them.
The widow asks the court to suspend the proceedings so that the cryptobirth has the opportunity to raise funds and pay debts to depositors. One of the sources of funds - the sale of software platform QuadrigaCX(another logical option - the sale of rights to film adaptation of history - approx. Ed.) .
If the trial continues, then “many, if not all,” the clients of the exchange will suffer, Miss Robertson warned. In addition, the owners of the exchange offer to appoint an independent third party (Ernst & Young) to oversee the actions of the current leadership.