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Crypto trader boss dies with password to clients’ £110m | World News

Canada’s leading cryptocurrency exchange company has said it cannot repay $190m (£110m) to clients because its founder died with their passwords.

QuadrigaCX’s founder Gerald Cotten, 30, died “due to complications with Crohn’s disease” while travelling in India to open an orphanage in December, his wife Jennifer Robertson said.

Mr Cotten held “sole responsibility for handling the funds and coins” and no other members of the team could access the stored funds, she said in a sworn affidavit as she filed for credit protection on 31 January.

Ms Robertson said about $190m (£110m) in both cryptocurrency and normal money is in “cold storage” – where the company, or just Mr Cotten in this case, holds the key, not the client.

The founder held “sole responsibility for handling the funds and coins” and no other members of the team could access the stored funds, she added.

QuadrigaCX employees cannot access £110m because Mr Cotten died with the password

QuadrigaCX employees cannot access £110m because Mr Cotten died with the password
She has her husband’s laptop but she does not know the password and a technical expert they hired had not been able to bypass its encryption, she told the court.

Ms Robertson added in the affidavit that she and her colleagues have had threats made against them from online cryptocurrency communities – especially from Reddit users.

On 31 January the company’s board of directors applied for creditor protection, with Ernst & Young expected to be appointed on Tuesday to oversee the proceedings.

A statement from the board said: “For the past weeks, we have worked extensively to address our liquidity issues, which include 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, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us.

“Unfortunately, these efforts have not been successful.”

QuadrigaCX customers have been complaining on social media that they have not been able to withdraw money from their accounts.

Ally Shapoval wrote: “Hello, Quadriga! I withdrew money from my Quadriga account to my bank more than 2 weeks ago. WHERE IS MY MONEY? STILL NOT THERE.

“I sent you emails, you are not responding.”

Another wrote in French: “I have sent lots of emails, but I just get automatic responses, I’m not even able to get my crypto out.”

Some are questioning whether Mr Cotten is even dead and others have accused the company of lying to them.

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Easter: FAAN assures Nigerians of safety

The Federal Airports Authority of Nigeria (FAAN) has assured passengers and other airport users of safety during the Easter celebration.

FAAN gave the assurance in a statement signed by its General Manager, Corporate Affairs, Mrs Henrietta Yakubu, in Lagos on Wednesday, NAN reports.

Yakubu noted that all necessary facilities, infrastructure and manpower had been deployed to ensure seamless facilitation at the airports.

She added that the relevant security agencies had been mobilised to beef up security at all airports during the period.

Yakubu also advised intending travelers to endeavour to leave for the airport early enough, so as to ensure that check-in formalities are conducted in good time.

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Court takes decision on sale of 9mobile

A Federal High Court in Ikoyi, Lagos, on Wednesday dismissed a suit filed by Spectrum Wireless Communications Limited against Emerging Markets Telecommunications Services (EMTS), owners of 9mobile, challenging the sale of the company.

NAN reports that the court, Presided over by Justice CJ Aneke, in a ruling on the preliminary objections filed by counsel to EMTS, upheld that the defendant’s prayers in Suit No. FHC/L/CS/153/2018 that there was no direct shareholding relationship between Spectrum Wireless and EMTS, thereby vesting on Spectrum the right to sue EMTS to protect its alleged shareholding in EMTS.
The Court also upheld the defendant’s position that there was no privity of contract between EMTS and Spectrum as Spectrum was not a shareholder in EMTS and could not be said to have been directly affected by the actions of its shareholders – Mubadala Holdings Cyprus Ltd, Myacynth and Etisalat International Nigeria Ltd.

The court further upheld the defendant’s position that if at Spectrum had a right of action, its action should be against PTHNV, the company it originally invested in and not EMTS.

The court, therefore, upheld the submission of counsel to EMTS that not being a shareholder of EMTS, Spectrum lacked the locus standi to bring the suit against EMTS on the basis of any decision taken by the shareholders of EMTS.

The court, therefore, upheld the defendant’s prayers saying that Spectrum lacked the locus standi to sue, adding that the concept of “indirect shareholding/economic interest” claimed by Spectrum was unknown to Nigerian law, which only recognized members of a company as those named in its Register of Members.

Justice Aneke also held that Spectrum is not a party to the credit facilities which it claimed were unlawfully obtained, and its elementary law that only parties to a contract can make judicial claims in respect thereof.

The court, therefore, dismissed the suit in its entirety.

In his reaction to the ruling, the Company Secretary/Legal Adviser, 9mobile, Ore Olajide, said “this was victory for democracy, victory for the rule of law in Nigeria, victory for company law, victory for legal practitioners, victory for corporate lawyers, academia and students of law.

“9mobile will continue to focus on satisfying our numerous customers and stakeholders who have faith in us and have stayed the course with us”.

It is recalled that Spectrum Wireless Communications sued EMTS and 16 other defendants including United Capital Trustees Limited (‘the Lenders’), the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) over the sale of the telco.

The company claimed that it acquired indirect holding of 30 per cent of the shares of EMTS after a private placement and was allotted 4,041,096 Class A shares of Premium Telecommunications Holdings NV (“PTHNV”) which owns 99% of the shares in MyaCynth Coperative UA (“MyaCynth”).

The plaintiff also claimed that MyaCynth holds 30 per cent of the shares of EMTS BV
and EMTS BV, holds 99.9 per cent of the shares of EMTS and that EMTS’ syndicated loan from the 2nd to 4th defendant’s and was granted without the requisite statutory approval of the CBN, and can, therefore, not be enforced through the sale of EMTS’ shares and assets by the 2nd to the 14th defendants.

Spectrum also claimed that its investments in EMTS would be lost if 15th to 17th defendants were allowed to effect the sale of EMTS.

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FG moves to have Innoson boss arrested

The Federal Government, on Monday urged the Federal High Court in Lagos to issue a bench warrant against Innoson Nigeria Limited’s chairman Mr. Innocent Chukwuma and some of his employees.

They were charged in a fraud case before Justice Ayokunle Faji.

The Police had earlier charged them with an alleged N2.4billion shipping fraud, but the Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN), later took over the case.

Others named in the charge are Charles Chukwuma, Maximian Chukwura, Mitsui Osk Lines and Anajekwu Sunny.

The prosecution is praying the court to order the arrest of Innoson Motors Chairman and his staff for failing to turn up to take their plea in the criminal charge.

On Monday, Chukwuma and his staff were absent in court.

Prosecuting Counsel Mr. Julius Ajakaiye moved an application urging the court to order the absent defendants’ arrested.

He said the charge was served on them through a court-ordered February 8, 2016 substituted service following the AGF’s take-over of the case.

Consequently, he said the defendants were yet to take their plea and should therefore be compelled to appear.

He added that an April 12, 2016 amended charge could not be served on the absent defendants.

Ajakaiye urged the court to grant his application by ordering their arrest.

But defence counsel Chief George Uwechue (SAN) and Prof. C. Mbadugha prayed the court to dismiss the application.

They argued that the court lacked jurisdiction to issue the warrant against the defendants “because they were not properly summoned before the court”.

They said the application offends Order 6 of the Federal High Court Civil Procedure Rules, adding that there was no proper service on their clients.

Justice Faji adjourned until July 3 for ruling.

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