Cryptocurrency exchange loses $145 million after CEO takes passwords to the grave

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The online startup can't retrieve about C$190 million (US$145 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed Jan 31 in Halifax, Nova Scotia.

Canadian cryptocurrency exchange QuadrigaCX may be reaching for the ouija board - after its founder, Gerald Cotten, died suddenly with the only password, leaving his widow unable to access £145m in client funds.

In an affidavit, the widow of Gerald Cotten, Quadriga's founder, CEO and sole director, said he died suddenly on December 9 due to complications from Crohn's disease.

"Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost", Jennifer Robertson, the widow of the exchange's founder, Gerald Cotten, wrote after his reported death of complications from Crohn's disease in December, as CoinDesk reported, citing a court filing.

Canadian crypto exchange QuadrigaCX owes its customers about $190 (249 million Canadian dollars).

The debt filing comes weeks after Robertson announced that Cotten had died - an event she described as "a shock to all of us".

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He took sole responsibility for the handling of funds and coins and the banking and accounting side of the business and, to avoid being hacked, moved the "majority" of digital coins into cold storage. Robertson has asked the court for a stay of proceedings to protect the company from lawsuits and buy time while QuadrigaCX tries to access the cryptocurrency tied up in its cold wallets.

While Robertson has Cotten's laptop, it's encrypted and she does not have a password or recovery key.

However, the funds stored in cold wallets were more as compared to the hot wallets.

"Despite repeated and diligent searches, I have not been able to find them written down anywhere", the affidavit states. She said she had also received threats and slanderous comments.

When QuadrigaCX broke its silence a week later, the company revealed it had filed for creditor protection in the Nova Scotia Supreme Court, according to reporting from Coindesk. She also asked the court to appoint global accounting firm Ernst & Young to oversee its dealings while QuadrigaCX tries to recover the lost holdings.

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