Nova Scotia crypto-exchange, Quadriga CX, says it will not be able to pay back its customers and investors over $250m because its CEO, Gerald Cotten, died while on a trip to India.
The company says Cotten was the only one who knew the passwords and security keys to the company’s funds.
Court filings have revealed that last Tuesday the Supreme Court of Nova Scotia approved protection against creditors for 30 days.
Investors and customers were furious and have immediately taken legal action claiming the whole scenario is extremely suspicious.
In a note on Facebook , Cotten’s wife reported that he died suddenly in India of complications related to Crohn’s disease while on a trip to open an orphanage. He was 30 years old.
Crohn’s decease is very rarely fatal. According to doctors, patients with Crohn’s decease have a 97% survival rate if they follow a proper treatment plan.
Cotten’s wife claimed that he always used secured and encrypted laptop and no matter how hard she searched she was not able to unlock it. This is believed to be the first ever time a company has ‘lost’ this amount of money due to one individual losing digital keys.
Nova Scotia crypto-exchange a scam
Theories are now circulating that he faked his own death in an elaborate scam to steal his customers’ funds. There are several odd circumstances surrounding Cotten’s death, which have authorities interested:
- Cotten’s will was signed on November 27th, less than two weeks before his death on December 9th
- before his death, the company had transaction delays and legal disputes, in which millions of dollars were frozen
- Quadriga CX was run essentially as a one-man show
- the Indian state of Rajasthan published his death certificate, with Mr Cotten’s name , misspelled as ‘Cottan’, but declined to provide any further comment.
Dean Skurka, VP for finance and compliance at Canadian cryptocurrency platform, bitbuy.ca, said that cases like this simply serve to “highlight the need for the regulation” of crypto exchanges to make sure things like this will not happen in the future.