The Canadian crypto exchange QuadrigaCX owes its investors about $250 million CAD (US$190 million) in both cryptocurrencies and fiat funds, but its late founder was the only person at the company who knew how to access the money, as CoinDesk reports.
Citing court documents it had obtained from the Nova Scotia Supreme Court, CoinDesk notes that “there were roughly 115,000 users with balances signed up on the exchange, with $70 million CAD in fiat and $180 million CAD in crypto owed overall,” as of Jan. 31. Gerald Cotten, founder and CEO of QuadrigaCX, died of complications from Crohn’s disease while traveling through India last December.
Jennifer Robertson, identified in court filings as Cotten’s widow, said Cotten had “‘sole responsibility for handling the funds and coins,’ and the remaining team members have had no luck accessing the exchange’s cold wallets since,” CoinDesk reports.
The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million, according to the affidavit.
It was not clear what portion of the exchange’s crypto holding were kept in cold storage, versus its hot wallet. In the affidavit, Robertson explained that “only a minimal amount of coins” were stored in the hot wallet, but specifics were not provided.
Robertson said that some of the funds could be stored in other crypto exchanges, but hasn’t been able to confirm whether this is actually the case or not. QuadrigaCX has not only been blocked from accessing the cryptoccurency that it owes investors, but also fiat funds, as CoinDesk notes.
The exchange’s access to its fiat holdings have also been “severely compromised” by banking issues, the filing says. In particular, a now-resolved legal fight with the Canadian Imperial Bank of Commerce (CIBC) has resulted in ongoing issues.
In particular, a payment processor working with Quadriga, Billerfy, has reported problems with finding a banking partner, preventing the processor from releasing any funds back to the exchange, and therefore, to its customers.
In addition to the roughly $30 million CAD currently being held by Billerfy, three other third-party processors are holding around $565,000 CAD combined.
A fifth payment processor called WB21 is holding another $9 million CAD and $2.4 million USD (roughly $9.2 million USD total) on Quadriga’s behalf.
Robertson wrote in a court filing that it “urgently needs a stay of proceedings which will allow Quadriga and its contractors additional time to find whatever stores of cryptocurrency may be available and also to negotiate the bank drafts available to Quadriga,” Robertson has requested a stay in order to stave off any investor lawsuits, which could result in “the exchange’s customers might suffer further damages.”
Quadriga has previously filed for creditor protection.
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