Crypto traders who used a Canadian crypto exchange have expressed their concerns over the status of their investments following the unexpected death of its CEO.
Users of QuadrigaCX were shocked to hear of the sad and unexpected death of Gerald Cotten during a visit to India late last year.
However, it has since been alleged that only Cotten knew the password to the so-called “cold storage” system.
As a result, up to $190 million is now stuck – and cannot be accessed by anyone.
Cotten was 30 years old at the time of his death. His widow, Jennifer Robertson, has now approached the Nova Scotia Supreme Court to confirm in a sworn affidavit that the firm her late husband ran is in debt to its customers.
An application was made at the same time for “creditor protection”, which would in theory give some hope to those looking to get their money back.
It is understood that the debt is both cryptocurrency and fiat in nature.
In a statement on its website, QuadrigaCX said that it had hired financial services firm Ernst & Young to assist it in the pursuit of the funds.
“An application for creditor protection in accordance with the Companies’ Creditors Arrangement Act (CCAA) was filed today in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers”, it said.
“The Court is being asked at a preliminary hearing on Tuesday February 5 to appoint a monitor, Ernst & Young Inc., as an independent third party to oversee these proceedings.”
In bad news for investors, the statement also confirmed that problems around accessing the cash were still ongoing.
“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 said.
“Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.”
While proceedings to locate access to the system are still ongoing, coverage in the industry press has indicated that users are becoming agitated – with some even accusing QuadrigaCX of cryptocurrency fraud.
One Twitter user suggested that they were about to call the fraud department of the Canadian police force.
“India’s great place to fake your own death a month ago…”, another said.
It is understood that a further court case will take place today in the Nova Scotia Supreme Court. Nova Scotia is a Canadian province located at the eastern tip of the country, bordering the Atlantic Ocean.
It is understood that the hearing, which takes place at 8.30am EST, will explore a report from Ernst & Young – which recommends that QuadrigaCX keep its website down.
The decision to do this occurred last week and coincided with the appointment of a group of new directors.