QuadrigaCX Granted Creditor Protection as Research Suggests It Never Had $145 Million

Embattled cryptocurrency exchange QuadrigaCX has recently been granted creditor protection by the Nova Scotia Supreme court judge Michael Wood. This, as research starts suggesting the firm never had the $145 million it owes its users.

The protection means that for 30 days, QuadrigaCX is safe from creditor’s lawsuits, giving it time to get the funds that were supposedly locked out after its CEO Gerald Cotton unexpectedly passed away on December 9.

As CryptoGlobe covered, Cotton was supposedly the only person with access to the exchange’s cold storage keys, and after he passed away the funds were allegedly locked away. Recent reports also revealed he filed for a will 12 days before passing away. The documents show he left all his assets to his wife, Jennifer Robertson, and made her the executor of his estate.

The exchange’s complex situation saw Robertson filed an affidavit mentioned she wasn’t able to retrieve the funds in cold storage. As she explained it:

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.

To repay its users, the exchange is said to be looking into selling its platform. Blockchain portal Zerononcense has, however, published a report claiming that QuadrigaCX never had the $145 million in crypto it claims to have lost access to.

The portal’s research points to the possibility of QuaadrigaCX not having a cold wallet to begin with, and raises questions over its operational practices, and to its supposed failures to access its remaining funds. Its research reads:

It does not appear that QuadrigaCX has lost access to their Bitcoin holdings. It is worth noting that there are several outgoing transactions that have been made since the alleged date of Gerald Cotten’s passing (December 9th, 2018).

On social media, QuadrigaCX’s victims have been pointing out there are a lot of suspicious bits to the story, and according to some victims the wallets that held their funds at QuadrigaCX have been moved after the ordeal.

While some just don’t believe QuadrigaCX had any funds, others dispute Cotten has even passed away in India. Recently, however, CoinDesk obtained his death certificate issued by the Government of Rajasthan’s Directorate of Economics and Statistics. The document, as the news outlet points out, is the strongest evidence so far for QuadrigaCX’s story.

Robertson, Cotten’s wife, has reportedly hired a hacker to try and have access to his laptop so she can reach the funds stored in the cold wallet. Before the complicated situation emerged, its users were unable to withdraw funds over a battle with a local bank.