Embattled Canadian crypto exchange QuadrigaCX, already embroiled in a variety of previous legal cases, claims that it no longer has access to roughly $190 million of clients’ holdings, though experts are not convinced.

QuadrigaCX says founder Gerald Cotten died unexpectedly “due to complications with Crohn’s disease on December 9, 2018 while travelling in India” – and was the only person who knew the password to the company’s alleged “cold wallet” where it kept the vast majority of client holdings.

A “cold wallet” is a physical data storage device that is not connected to the internet.

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In a sworn affidavit with the Nova Scotia Supreme Court, Cotten’s widow Jennifer Robertson claimed that she does not know the password and her husband was the only who did. They had even hired an expert to crack into the laptop but was unable to beat the device’s encryption.

Cotten allegedly held “sole responsibility for handling the funds and coins” for an exchange that boasts roughly 26,500 Bitcoin ($92.3 million USD), 11,000 Bitcoin Cash ($1.3 million), 11,000 Bitcoin Cash SV ($707,000), 35,000 Bitcoin Gold ($352,000), nearly 200,000 Litecoin ($6.5 million) and about 430,000 Ethereum ($46 million), totaling $147 million.

Weeks after announcing the founder’s death, the company’s site went down, ostensibly for ‘maintenance’, while in addition, the figure cited in the affidavit was inaccurate. The combination of peculiar circumstances prompted many cryptocurrency experts to question the official story.

We have thousands of wallet addresses known to belong to @QuadrigaCoinEx and are investigating the bizarre and, frankly, unbelievable story of the founder's death and lost keys. I'm not normally calling for subpoenas but if @rcmpgrcpolice are looking in to this, contact @krakenfx — Jesse Powell (@jespow) February 3, 2019

In-depth analysis of the blockchain (a distributed ledger of transactions across several computers, accessed via a peer-to-peer network) by cryptocurrency researchers and analysts determined that the company had, in fact, never lost access to its Bitcoin wallet, calling its version of events into disrepute and further fuelling speculation among the crypto community about what was going on.

1/ After a couple of days of combing through wallet explorers, examining TX IDs, addresses, and coin movements, I present to you all an analysis of QuadrigaCX's Bitcoin Holdings: https://t.co/HsAZFIjbmQ — CryptoMedication (@ProofofResearch) February 3, 2019

The company was already under investigation by The Canadian Imperial Bank of Commerce for payment processing irregularities, which seized $26 million in assets in January 2018. The Ontario Superior Court of Justice also found that approximately $67 million worth of transactions were improperly transferred into the personal account the payment processor.

Meanwhile, Quadriga has filed for a stay of legal proceedings to allow the company and “its contractors additional time to find whatever stores of cryptocurrency may be available”, Robertson wrote.

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The company is also reportedly considering selling off its operating platform to pay users back. A court hearing to decide the company’s short-term legal fate is set for Tuesday, February 5.

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