A cryptocurrency exchange in Canada has revealed they can't repay most of their clients' $190 million in Bitcoin, Litecoin, Ether, and fiat currency holdings, and no, it wasn't because of a 51 attack.
Canada's leading cryptocurrency exchange company has said it can not repay $190m (£110m) to clients because its founder died with their passwords.
In an affidavit, the widow of Gerald Cotten, Quadriga's founder, CEO and sole director, said he died suddenly on December 9 due to complications from Crohn's disease.
The debt filing comes weeks after Robertson announced that Cotten had died - an event she described as "a shock to all of us".
The affidavit says the majority of the cryptocurrency was kept by Quadriga in a "cold wallet" or "cold storage", which is located offline and used to secure cryptocurrency from hacking or theft.
"Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost", Robertson wrote in the filing. The exchange's obligations to those users include cryptocurrency that was valued at some 180 million Canadian dollars ($137 million) in mid-December.
However, the funds stored in cold wallets were more as compared to the hot wallets.
Robertson said the exchange's new directors voted to "temporarily pause" the platform on January 26. "Despite repeated and diligent searches, I have not been able to find them written down anywhere", said Jennifer Robertson, Cotten's widow, in an affidavit.
QuadrigaCX took down its website last week and replaced it with a statement saying it had filed for creditor protection "to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers".
The 30-year-old had sole control of the company's "cold storage" - including handling the exchange's funds and coins - with no one else knowing the password or recovery key for his encrypted laptop. But Robertson provided the court with a copy of Cotten's death certificate, court records show, and Robertson said she and QuadrigaCX's interim chief executive have been hit with threats and "slanderous comments" by angry customers. A hearing is scheduled for Tuesday, and Ernst & Young has been chosen as a proposed monitor.