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Millions of dollars were missing when the CEO of a crypto exchange died without sharing the passwords to his accounts. Investigators, who have secured his laptop and other devices, have revealed the money is gone.
Gerald Cotten, the founder of QuadrigaCX, was thought to have had sole access to the funds and coins exchanged on it. After his death in December, his colleagues said that about $137 million in cryptocurrency belonging to about 115,000 customers was held offline in “cold storage” and inaccessible.
The case has sparked numerous theories, including that Cotten faked his own death and ran off with the cash. A court-appointed auditor, Ernst & Young, has secured Cotten’s laptop, home computer, USB keys and home computer. Using public blockchain records, it determined the digital wallets thought to contain millions were emptied in April, eight months before Cotten’s death, it said in a report last week.
“In April 2018, the remaining bitcoin in the Identified Bitcoin Cold Wallets was transferred out bringing the balances down to nil,” the report said.
The investigators said they found other issues too, such as that Quadriga kept “limited books and records” and never reported its financials.
Ernst & Young also reported that 14 user accounts were internally created under various aliases, traded on Quadriga’s exchange, and withdrew cryptocurrency to addresses not tied to Quadriga.
Burdened with $190 million in debt and unable to find or access the money, Quadriga filed for creditor protection in late January. A Nova Scotia court threw the company a lifeline this week, granting it a 45-day extension that prevents creditors from filing lawsuits against it until mid-April.
Kraken, another crypto exchange, is offering $100,000 for information on where Quadriga’s cash has gone.
A previous version of this story incorrectly stated that investigators cracked Cotten’s laptop and discovered money was missing. In fact, they have possession of his laptop and identified money was missing through public blockchain records.