Death is complicated enough when a private investor dies with the private keys to their fortune.
But the pain is amplified exponentially should the deceased be the CEO of a digital currency exchange responsible for the safekeeping of millions of dollars.
The death of Gerald Cotten, founder and CEO of crypto exchange Quadrigacx, has led to the loss of CAD $190 million (~ U.S. $145 million) stashed in the platform’s cold storage wallets.
Canadian exchange Quadrigacx this week filed for protection from creditors in the
Nova Scotia Supreme Court, claiming to have failed to locate or access the money since the death of Cotten on Dec. 9, according to a report by local newspaper The Globe and Mail.
Significant customer investments are understood to be locked up following the loss of cold storage wallets, especially since Quadrigacx was the largest crypto exchange in Canada by the traded volume.
One customer is reported to have lost $700,000.
Cryptocurrency can be lost, particularly if the owner doesn’t share the private keys that allow access to the wallet to a third party by way of legacy management.
Chainalysis estimates that about 25 percent of all bitcoins now in circulation (valued at roughly $23.5 billion) have already been lost forever, with death accounting for a sizeable portion of the losses.
Following the death of Cotten, Quadrigacx has reportedly lost 26,488 BTC, 11,278 BCH, 11,149 BSV, and 35,320 BTG. About 199,888 LTC and 429,966 ETH has also been lost.
It was not clear what portion of the exchange’s crypto holding were kept in cold storage, versus its hot wallet. In the affidavit, Jennifer Robertson the widow of Cotten explained that “only a minimal amount of coins” were stored in the hot wallet, but specifics were not provided.