The chief executive of Coinsquare warns that the ongoing saga involving Canadian cryptocurrency exchange Quadriga CX will have a chilling effect on the overall market, adding that he expects users will only be able to recover some of their money.

“At end of the day, you have 100,000 people that now have their money locked away with Quadriga, without knowing what’s going to happen,” Coinsquare Chief Executive Officer Cole Diamond told BNN Bloomberg’s Jon Erlichman and Amber Kanwar Thursday.

“These are 100,000 people who are early adopters, the biggest supporters of the space, quite frankly. So, without them in the space, that’s a pretty big issue for that next level of growth.”

The sudden death of Gerald Cotten, the Canadian behind cryptocurrency exchange Quadriga CX, has sparked big questions about how digital currencies operate. Cotten died suddenly in December, and left $190 million in bitcoin and other digital assets protected by his passwords irretrievable.

The exchange, which launched in December 2013, allowed users to deposit cash or cryptocurrency through its online trading platform, storing the digital coins on blockchain ledgers that are accessible only by an immutable alphanumeric code.

Amid the fallout from Quadriga – in addition to slumping cryptocurrency prices in recent months – Diamond says the sector needs to address a number of issues before it can grow further.

“We need to start fixing a lot of the underlying problems that exist in the market right now, particularly the fact that crypto is unforgiving and also the fact that exchanges are not regulated. Fix those two problems and we’re ready for the next big wave,” Diamond said.

Diamond added that his exchange has offered its blockchain team’s expertise to help with the recovery process at Quadriga.

“I think they’ll get some of it back,” he said.

“Certainly this is very bad for cryptocurrency in Canada, and we want to do everything we possibly can to solve it.”

With files from Bloomberg News