Digital-asset exchange Quadriga CX has a $275 million problem with no obvious solution – just the latest cautionary tale in the unregulated world of cryptocurrencies.

The laptop, email addresses and messaging system Gerald Cotten used were encrypted, according to his widow, Jennifer Robertson. Credit:Bloomberg

The online start-up can't retrieve about $C190 million ($201 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers, according to court documents filed on January 31 in Halifax, Nova Scotia. Nor can Vancouver-based Quadriga CX pay the $C70 million ($74 million) in cash it is owed.

Access to Quadriga CX's digital "wallets" – an application that stores the keys to send and receive cryptocurrencies – appears to have been lost with the passing of Quadriga CX chief executive Gerald Cotten, who died on December 9 in India from complications of Crohn's disease. He was 30.

Mr Cotten was always conscious about security – the laptop, email addresses and messaging system he used to run the five-year-old business were encrypted, according to an affidavit from his widow, Jennifer Robertson. 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.