Canadian bitcoin fund QuadrigaCX is in serious trouble after the sudden death of founder Gerald Cottne.
Cotten was the only person who knew the wallet password where millions of dollars of depositors are stored in cryptowoods such as bitcoin or ethereum.
With his death and the problems arising from it, the bank for the crypts received a lot of debt with his clients and declared bankruptcy. According to documents submitted in Canada, QuadrigaCX owes about 250 million Canadian dollars, approximately 166 million euros to its customers.
In an attempt to protect money, the founder were regularly moved to a password protected by a wallet and disconnected from the Internet, in order to avoid theft of this in the case of a hack.
Cotten was solely responsible for the security of his client's assets, and he would be the only guilty if he broke the company or lost it. No one expected Cotten to die of complications from Crohn's disease in December 2018 when he opened an orphanage in India.
The sudden death of the director of QuadrigaCX was announced at the end of January, with approximately 115,000 customers unable to withdraw their money, as most funds are stored in an outer wallet. Cotten was the only person who knew the password.
At the time of the bankruptcy announcement, QuadigaCX owned 26,488 bitcoins worth about 78.8 million euros, 429,966 eters, or about 40 million euros at the current price, as well as several million in bitcoin money, bitcoin gold and litecoins.
All funds stored outside are on a laptop computer where Cotten has done his job. The computer is encrypted and password protected, which prevents access to data.
Limit availability in client wallets
By keeping the minimum possible currency in "hot" wallets, those hosted on connected servers and thus exposed to external attacks, the company has limited the amount of money that its customers could take from their accounts.
Now the problem is transferred to QuadrigaCX managers who intend to continue working to access these external wallets, but without the password and taking into account the level of security of the current encryption, Cotten password hacking can take years.