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Crypto Scam| QuadrigaCX faces loss of $145 million after Founder’s death

QuadrigaCX

QuadrigaCX is grabbing news headlines for all the wrong reasons. Recently, a Canadian news daily, The Globe mail brought to light that , the exchange is missing $145 million in digital assets. Yesterday, TCU reported  QuadrigaCX has allegedly filed for creditor protection. The firm has filed the application in  Nova Scotia Supreme Court today in compliance with the Companies’ Creditors Arrangement Act (CCAA).

The  PwC Canada states

“THE CCAA PRESENTS AN OPPORTUNITY FOR THE COMPANY TO AVOID BANKRUPTCY AND ALLOWS THE CREDITORS TO RECEIVE SOME FORM OF PAYMENT FOR AMOUNTS OWING TO THEM BY THE COMPANY.”

Furthermore, the exchange  presently holds CA$375,000 ($286,000) in cash. On the other hand, it owes CA$260 million ($198,435,000) to its users.

While the exchange kept most assets in cold wallets, Cotten was accountable for wallets and their keys. However, the company is at loggerheads and has been unable to find these after his untimely death.

Ernst & Young to probe in the matter

A filing from Ernst & Young reportedly states,

“Quadriga was unable to access the cold wallets and/or discovered that the cold wallets contained minimal cryptocurrency units.”

‘Big Four’ auditing firm Ernst & Young was roped in as an independent third party to monitor QuadrigaCX proceedings. Cotten mostly worked form his computer at home which was encrypted.Subsequently, Cotten’s wife, Jennifer Robertson, reportedly stated in an affidavit,

“I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.”

In addition, Robertson went on to hire a cybersecurity expert to “hack into Gerry’s computers”. However, her efforts went in vain .

Exchange Operators express Concern over QuadrigaCX

Other exchange operators expressed their sentiments and said it is quite unusual for a single entity to hold access to entire exchange’s funds. Also, it would make Cotten an easy target for kidnapping and ransom extortion.

Michael Gokturk, CEO Einstein Exchange in Vancouver, said,

“It’s the equivalent of walking around with millions of dollars in cash on you at all times.”

Also, Robertson’s affidavit reportedly states,

“There have also been threats made against [her]. “Slanderous comments have been made against [her] and sent through Facebook messenger to [her] entire contact list.”

As a matter of fact, Robertson is allegedly spearheading the creditor protection motion for QuadrigaCX. Also, a preliminary hearing has been set for Feb. 5

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