Canadian crypto exchange QuadrigaCX can't repay $190 million in client holdings because its founder died late past year with the only password that would allow access to the funds, Coindesk reported.
Digital-asset exchange Quadriga CX has a US$200 million problem with no obvious solution - just the latest cautionary tale in the unregulated world of cryptocurrencies.
What was the password again? Cotten's laptop was encrypted, and his widow, Jennifer Robertson, and the expert she hired have been unable to access any of its contents.
Robertson was not involved in the business.
"Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost", Robertson wrote after her husband died suddenly of complications from Crohn's disease in December.
According to a report by CoinDesk, a court filing suggests that crypto exchange owes $250 million CAD as most of the funds were kept in a cold wallet (a physical device that isn't connected to the internet) which could be accessed only by Gerald.
'[This includes] attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit.
Quadriga did not have offices or a bank account of its own; in the court filing, Robertson said, "Gerry ran the business through his laptop, mostly at our home, but also wherever he happened to be". "I would probably avoid [cryptocurrency] in the future", Cavalic said.
The platform continued to accept funds after Cotten's death but was paused by directors on January 26. "I'm kind of preparing for the worst".
Ms Robertson said in her affidavit she had received online threats and "slanderous comments", including questions about the nature of Mr Cotten's death, and whether he is really dead.
When QuadrigaCX broke its silence a week later, the company revealed it had filed for creditor protection in the Nova Scotia Supreme Court, according to reporting from Coindesk. And she asked the court to give Quadriga "additional time to find whatever stores of cryptocurrency may be available" and resolve other outstanding issues.