Employees of a Canadian cryptocurrency exchange Quadriga CX can no longer locate or access customer funds because the company's CEO is dead and no one knows the passwords.
February 6, OctaFX – Crypto talk so far this week has revolved around the death of an exchange CEO who died with the password of all wallets kept secret. Gerry Cotton, the CEO of Quadriga CX, died in a trip to India where he was set to provide funds for the construction of a children’s home.
Gerry Cotton's Death Could Lock Away $190M Worth of Cryptos
His death has affected more than 100K customers who had cryptocurrencies worth more than $190 million. With his passing, it has become impossible for the staff and clients to access the currencies they hold because he was the only one with the passwords.
His computers, mobile devices and email addresses were encrypted, which makes accessing the digital wallets impossible. Experts brought in to hack the system too have not been able to do so. In a statement, the firm’s directors said:
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. Unfortunately, these efforts have not been successful.
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Yesterday, a judge at Halifax granted the company a 30-day stay as it searches for the lost crypto. During this period, the company cannot be sued by disappointed customers, some who are owed more than $1 million.
Death of Quadriga's CEO An Epic Exit Scam?
His death has also led to fresh conspiracy theories with many people believing that he faked his death as an exit strategy. In the past, many people have faked their deaths in a bid to evade prison time or in order to receive their life insurance funds.
In 2016, all the directors and co-founders of the company resigned, which has been viewed as further evidence for the theories. Further, the company did not have insurance for the operations.
In a statement to Wired Magazine, Emin Gun Sirer, a professor at Cornell University said:
It’s astounding to me that a company of this size can be run with the same accounting procedures of Joe’s Fish ‘n Chips, with a single person in charge and no accountability. That’s far from the norm. It’s not a good look for our industry.
The exchange saga comes at a time when investors are concerned about regulations. To self-regulate, most exchanges have multiple ways to access currencies. They also have backups and insurance policies, which ensures that the funds are safe.
The ETHUSD pair is currently trading along the important 100 level, which provides an important support. This price is below the YTD high of more than 150. The pair could continue to decline, with the next support being 90.
Disclaimer
This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.