Lessons in key-man risk from the QuadrigaCX disaster

Chris Dannen

By Chris Dannen


The founder of a Canadian cryptocurrency exchange has died, leaving his colleagues and heirs without access to his cold storage system. Companies generally prepare contingency plans for the death or disability of a key employee, sometimes by buying a special insurance policy. QuadrigaCX had nothing of the kind, and will go bankrupt. In a world of bearer assets, foresight is survival.

QuadrigaCX Owes Customers $190 Million, Court Filing Shows
"In a sworn affidavit filed Jan. 31 with the Nova Scotia Supreme Court, Jennifer Robertson, identified as the widow of QuadrigaCX founder Gerald Cotten, said the exchange owes its customers roughly $250 million CAD ($190 million) in both cryptocurrency and fiat. ... Cotten reportedly died of Crohn’s disease in Jaipur, India in early December 2018. The exchange announced his death earlier this month. A death certificate was included in the list of exhibits. The founder seemingly had sole control or knowledge of Quadriga’s cold storage solution. Robertson wrote that after his death, 'Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost.'"

Other News

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