Canadian crypto exchange Quadrigacx declared bankrupt

Canadian crypto exchange Quadrigacx declared bankrupt.

Image source: Quadrigacx / Shutterstock / Cryptoid.info

Christian Ploog

christian.ploog@trijo.co

After the Vancouver-based crypto exchange Quadrigacx failed to carry out a corporate reconstruction, it has now been officially declared bankrupt.

In early February, it was revealed that the Canadian crypto exchange Quadrigacx allegedly lost nearly $190 million in cryptocurrencies when their founder and CEO Gerald Cotten died in Crohn’s disease in India late last year.

Reportedly, the money was stored offline in the exchange’s so-called “cold storage” and the deceased founder was the only one who had access to the keys to the wallet. The Vancouver-based exchange, therefore, feared that the assets were lost forever.

However, when an IT security company managed to unlock Cotten’s encrypted laptop where he kept the private encryption keys, it turned out that the cold storage wallets were empty. After the exchange failed to carry out a corporate reconstruction, it has now been officially declared bankrupt, local Canadian media CBC reports.

115,000 users affected

In total, the exchange owes more than $260 million, in both fiat money and cryptocurrencies, to a total of 115,000 users. $70 million of that is cash and is allegedly spread across different bank accounts and accounts held by third-party payment processors. Now the court process must show whether the estate can access this money.

In a report released last week by the consulting firm Ernst & Young, it is stated that Cotten mixed his private money with the company’s money. According to the report, funds belonging to Quadrigacx may also have been used to buy assets outside the business. However, details were not mentioned in the report, CBC reports.

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