Crypto Exchange QuadrigaCX Locked out of Millions It Owes Customers, Filings Show

The controversial cryptocurrency exchange QuadrigaCX is, according to court documents, locked out of millions of dollars worth of crypto it currently owes its customers, as its CEO inexpertly passed away late last year with the keys to access them.

According to Canadian news outlet Globe and Mail, the company’s founder and CEO Gerald Cotton passed away in December from Crohn’s disease, and since then the company has been unable to access over $145 million it reportedly had in cold storage.

This, the exchange’s representatives claim, as Cotton was the only person who had access to the funds held in cold storage. QuadrigaCX has since gone offline, and has posted a notice telling users about the ordeal. It has also filed for creditor protection with a Canadian higher court in Nova Scotia to avoid facing legal action from angry users, which would only “complicate an already difficult situation.”

Cotton’s widow, Jennifer Robertson, filed an affidavit explaining what’s going on:

The laptop computer from which Gerry carried out the Companies' business is encrypted and I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them (the passwords) written down anywhere.

QuadrigaCX reportedly had 115,000 users, to which it owns an estimated CA$ 260 million ($198,000). Reportedly, it only has access to CA $375,000 ($286,000). A filing from Ernst & Young states that it has been “unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units.”

The auditing firm has been appointed as an independent third party to monitor the case. Speaking to Globe and Mail other exchange executives claimed it was unusual for only one person to have access to the company’s funds, as it made him a target.

Cotton’s widow has already hired a security expert to try to hack into Cotton’s machine to get to the funds. To pay back its users, QuadrigaCX is reportedly considering selling some of its technology.

In the meantime the exchange’s users, which were already unable to withdraw their funds because of a legal battle with a Canadian bank, have been complaining on social media, with some asking for proof Cotton has indeed passed away.

Robertson’s affidavit claims that she has now been receiving threats on social media because of the ordeal.

OKEx to Foster Crypto Talent Via Mentorship Program

Popular cryptocurrency exchange OKEx is launching a mentorship program called Beacon Program in Europe to support those interest in the cryptocurrency space during the lockdown and foster new talent in the space.

According to a press release shared with CryptoGlobe, OKEx has noticed the cryptocurrency industry has been gaining significant traction, with the total number of confirmed Bitcoin transactions per day steadily rising since the March market crash, and the total trading volume on major exchanges surpassing $680 million in March.

The pandemic, according to the exchange, “undoubtedly accelerated the adoption of crypto” and encouraged people to see Bitcoin as a safe haven like gold or real estate. Given the increased interest, OKEx is expanding its presence beyond the 180 countries and regions it is currently serving, and expects to double its staff over the next two years.

The exchange’s CEO Jay Hao was quoted as saying:

This is an exciting time for OKEx, we plan to open new offices in more regions to better serve our users, and we’ve already started recruiting passionate blockchain professionals to grow and prosper together. We expect a 100% increase in the total number of staff in 2 years serving customers from around the world,

Hao added that OKEx is launching its Beacon Program to nurture talent in the cryptocurrency space. The program will recruit 6 mentees for a one-month mentorship program with Jay Hao himself and OKEx’s Director of Financial Markets Lennix Lai.

The program will see mentees join their mentors once a week for a 30-minute mentoring session on Telegram, and will allow them to participate in masterclasses given by industry professionals on topic surrounding the blockchain and cryptocurrency space.  The OKEx team will guide them by sharing industry research, news digests, and more with them so the most talented mentees join the firm.

As CryptoGlobe reported, OKEx burned 70% of its OKB token’s supply earlier this year, helping the cryptocurrency’s price surge little over 90% in a 30-day period. At the time it launched a testnet for its decentralized exchange, which further helped demand grow.

Featured image via Pixabay.