Quadriga CEO Mysteriously Passes Away, Brings $137 Million to the Grave

Last week, the founder and CEO of the Canadian crypto exchange Quadriga CX, Gerry Cotton, passed away. While this is certainly disheartening to hear, the situation has caused an interesting problem.

Due to his sudden death, Cotton brought over $137 million worth of Bitcoin, Litecoin, and Ethereum to the grave. According to some sources, Cotton is the only one who had access to these digital wallets effectively deleting these currencies from circulation. This leaves thousands of exchange customers wondering where their funds are, and if they’ll receive a refund.

Exchange Security

Cotton took the exchanges fund security very seriously considering the cold storage method he used to keep the coins was only known to himself. According to his wife, the laptop used to manage the exchange and storage of coins was all encrypted making it extremely challenging to investigate.

It’s difficult to blame the exchanges CEO for taking his customer's fund security seriously after several exchanges have experienced hacks and wallet theft over the past few years. Just last January, Coincheck has over $500 million in Bitcoin stolen from its reserves. And then there’s Mt. Gox, one of the oldest cryptocurrency exchanges that had almost 6% of all Bitcoin in circulation stolen from its wallets.

Did Cotton Fake His Death?

While the events that occurred are extremely unfortunate, some investigators believe Cotton could have potentially faked his own death to steal his customers money. Cotton supposedly passed away from Chron’s Disease which typically isn’t fatal. In addition, the death note was from India, a country that has been known to issue fake death certificates. Online speculators viewing blockchain transactions have noticed Litecoin being transferred from the exchanges cold wallet to a new address after his “death”.

The Importance of Decentralized Exchanges

These events shed more light on the importance of decentralized exchanges like CEDEX. On decentralized exchanges (DEX’s), customers are able to trade various cryptocurrencies from the comfort of their own wallet. If Quadriga was a decentralized exchange, this entire scenario could be avoided. In CEDEX’s case, we use a proprietary machine learning algorithm to allow the exchange to operate autonomously without human intervention. This is all done to simplify and add transparency the diamond appraisal and trading process.

What do you think happened to the Quadriga CEO? Let us know in the comment section below.