On February 4, 2019, it was discovered that QuadrigaCX, Canada’s largest cryptocurrency exchange, had lost almost all of the virtual currency it had received from its customers and filed for bankruptcy creditor protection in court. This is because the CEO who managed the cryptocurrency died suddenly and no one has access to the PC that stores the cryptocurrency. In response, creditors are seeking to dig ceoses out of their graves in search of lost cryptocurrency, and the FBI is also investigating. QuadrigaCX is a cryptocurrency exchange founded by Gerald Cotten. As of February 4, 2019, It was reported that Cotten’s death had completely inaccessible virtual currencies of more than 137 million dollars, including Bitcoin Litecoin Ethereum.
Cotten’s death certificate was submitted by Mr. Cotten’s wife, Jennifer Robertson, who said the cause of death was “a complication of Crohn’s disease during a vacation in India.” According to Robertson, the cryptocurrency was stored on a laptop that only Cotten knew about the password. Some laptops have cold wallets that are completely separate from the Internet, and Cotten stored the cryptocurrency in a cold wallet, but where is the cold wallet from The death of Mr. Cotten? It seems that he didn’t know how much he was keeping. On Tuesday, December 17, 2019, the New York Times announced that the amount of money that the exchange’s clients would no longer be able to access would reach 250 million dollars (approximately 27 billion yen). According to the New York Times, many customers are suspected of Cotten’s death, and the representative attorneys of the client sought out a Canadian law enforcement agency for an autopsy to dig up Cotten’s body and determine his identity and cause of death. The lawyer said there were “questionable circumstances regarding Mr. Cotten’s death and the loss of huge amounts of virtual currency” and called for the discovery and autopsy of the bodies to be carried out by 2020. Law enforcement authorities in Canada and the United States where QuadrigaCX is located at the time of writing are investigating possible fraud. In addition to authorities in Nova Scotia, Canada, the FBI is also investigating with the U.S. Internal Revenue Service (IRS), the Federal District of Columbia, and the Computer Crime and Intellectual Property Department.
According to the New York Times, one of the surveys found that QuadrigaCX has no basic corporate records, including accounting records. It has been revealed that QuadrigaCX had sent a huge amount of virtual currency to Cotten’s personal accounts and other exchanges. It is not recognized at the time of writing that there was business justification for the movement to Mr. Cotten’s personal account. Although the loss of currency is not considered in ordinary banks, it is not unusual in cryptocurrency. In February 2018, about 500 million yen was carried away, and in August it is reported that a bitcoin fraud worth 300 billion yen occurred in India.