Quadriga: Cryptocurrency exchange founder’s death locks $140m

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…As Officials say 7 dead, many injured in Paris apartment fire***

Canada’s largest cryptocurrency exchange is unable to access millions in digital currency following the sudden death of its founder.

Quadriga has filed for creditor protection and estimates that about C$180m ($137m; £105m) in cryptocurrency coins is missing.

It has not been able to locate or secure its cryptocurrency reserves since Gerald Cotten died in December.

Cotten, 30, had sole responsibility for handling the funds and coins.

In court documents filed with the Nova Scotia Supreme Court on 31 January, his widow Jennifer Robertson, says the laptop on which Cotten “carried out the companies’ business is encrypted and 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,” the affidavit states.

The company hired an investigator to see if any information could be retrieved but ongoing efforts have had only “limited success in recovering a few coins” and some information from Cotten’s computer and phone.

The company is also investigating whether some of the cryptocurrency could be secured on other exchanges, according to court files.

They say about 115,000 Quadriga users hold balances in their personal accounts in the form of cash obligations and cryptocurrency.

The company estimates it owes about C$250m ($190m; £145m) – including C$70m in hard currency.

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.

Liquidity problems for the British Columbia-based company began in January 2018 when Canadian bank CIBC froze C$25.7m linked to its payment processor after the bank had difficulty determining who were the owners of the money.

Those problems have been compounded by Cotten’s passing.

The founder died unexpectedly due to complications with Crohn’s disease while travelling in India, according to court documents.

In a statement posted online last Thursday, Quadriga said it is working to address its “liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallet”.

The company is due in court in Nova Scotia on Tuesday for a preliminary hearing on appointing firm Ernst and Young as an independent monitor to oversee the proceedings.

In the meantime, a fire in a Paris apartment building early Tuesday that authorities suspect was an arson attack killed seven people and sent residents fleeing to the roof or climbing out their windows to escape.

The Paris prosecutor says a woman has been detained in the initial investigation into the fire, which blazed for hours in a calm, high-end neighborhood on the city’s western edge. It choked the air with smoke and sent orange flames into the overnight sky.

One person is in life-threatening condition and 30 others were injured in the blaze, city fire service spokesman Clement Cognon told The Associated Press.

Though the fire was extinguished before dawn, Cognon said firefighters are still going door to door to ensure there are no more victims and prevent residual fires.

Firefighters rescued about 50 people, some from the roof or those who had clambered out of windows to escape the flames, Cognon said. Among the injured were six firefighters.

Emergency workers are also seeking to shore up the building that was badly damaged after flames shot out of windows stretching across the upper floors, in images of the operation released by the fire service.

“The situation was already dramatic when the firefighters arrived,” Cognon said.

Prosecutor Remy Heitz told reporters at the scene that authorities suspect it was a criminal act, though “the investigation has just begun” and it’s too early to definitively determine the cause of the fire. He said a woman who lives in the building was detained nearby. He would not provide further details on the investigation underway.

“I heard a woman screaming in the street, crying and screaming for help,” said witness Jacqueline Ravier, who lives across the street. She saw a young man blackened by smoke and a woman motionless on the ground. She said flames were shooting out for hours from the top of the building and smoke-covered victims were fleeing.

She said shaken residents were brought to her building and the one next door while firefighters continued to fight the flames. “We feel the smoke,” she said. “What’s surprising is how long it lasted.”

The building is on Rue Erlanger in the 16th arrondissement, one of the most high-end and calmest districts of Paris. It is close to the popular Bois de Boulogne park and about 1 kilometer (less than a mile) from the Roland Garros stadium that hosts the French Open tennis tournament and near the Parc de Princes stadium that’s home to Paris Saint-Germain, the country’s top soccer team.

More than 200 firefighters and emergency workers were involved in the operation, Paris police said, and the street was blocked off. Neighboring buildings were also evacuated.

The fire comes a month after a deadly explosion and blaze linked to a gas leak in a Paris bakery.

BBC with additional report from ABC