Canada’s Cryptocurrency Exchange Seeks Creditor Protection After Founder’s Death

Canada’s Cryptocurrency Exchange Seeks Creditor Protection After Founder’s Death

Quadriga, Canada’s largest cryptocurrency exchange is unable to access the millions of cryptocurrency following the sudden demise of its owner.

Quadriga has filed an application for the creditor protection and missing cryptocurrency with the Nova Scotia, after months of transaction delay on January 31. The problem began when Canadian bank froze C$25.7 million linked with the problems faced by the payment processor bank to identify the money’s owner.

The court has asked the exchange to appoint an independent monitor to oversee the proceeding at the court hearing on February 2019. It has been understood Quadriga is planning to appoint firm Ernst and Young for the purpose.

Quadriga has 363,000 registered users and owes about 250 million Canadian dollar, ($190m and £145m) including $70 million as a fiat currency.

Gerald Cotten, founder of the Exchange died at the age of 30 on December 9, 2018, while in India where he was opening an orphanage home for the needy children. He leaves behind an encrypted laptop with her wife who is unable to find the password to unlock her dead husband’s secret.

Apparently, crypto held by Quadriga was mostly held in cold wallets and Cotten was the only person who could access those wallets according to the affidavit signed by his wife with the Nova Scotia Supreme Court on January 31.

Although the company hired associate degree investigator for finding other ways to access the funds, so far no one is able to do so.

Christine Duhaime, a lawyer and founder of the Digital Finance Institute said, “ Users have very little recourse to recover those funds.”

The crypto enthusiast is surely familiar with the volatility of the digital currency as it is subjected to frequent hacks and attacks. This news has surely dragged the crypto investors and well-wishers regarding the long run of its security.

This act has reflected the need of proper rules and regulations for sure. Let's hope the volatility problems of the crypto to be addressed soon.