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A crypto exchange can’t repay $190M because the founder died with the only password

A crypto exchange can’t repay $190M because the founder died with the only password
[Photo: André François McKenzie/Unsplash]

When cryptocurrency fever started to peak around 2017, anyone who had bought bitcoin on a whim or because they wanted to poke around on the dark web (like in this Reply All episode) started to freak out about the passwords they were using for their bitcoin wallets address. If you could remember the password, you’d be digitally swimming in that digital currency. But if you couldn’t remember the password—and a lot of people couldn’t—your newfound wealth was locked away, most likely forever.

As the forgotten password horror stories made their way around the web, newcomers to the bitcoin world kept close track of their passwords and PINs. Now comes a new twist: Canada’s biggest crypto exchange says it cannot repay most of $190 million in client holdings after the founder unexpectedly died, taking the only password with him.

Gerald Cotten, the 30-year-old founder of crypto exchange QuadrigaCX, died with the only password for the company’s “cold storage,” Coindesk reported on Friday. Cold storage is where bitcoin enthusiasts keep their long-term investments in a digital vault safe from hackers. Now his widow is asking for creditor protection for the company, because it cannot access the cold storage funds, but only the considerably smaller “wallet,” which is used for transfers, CoinDesk wrote.

While his widow has Cotten’s laptop, she reportedly doesn’t know the password and the expert the firm had hired couldn’t bypass the encryption. According to court filings reported by Coindesk, the company has some 115,000 clients who had invested assets worth $70 million, which she estimates had grown to $250 million by December 2018. Because of the amount of money that is no longer accessible, conspiracy theorists are in full effect, the CBC reports, even claiming Cotten didn’t really die but merely absconded with the crypto cash. Even a death certificate has barely slowed the conspiracy theorists’ roll. It’s hard to blame them with so much money just out of reach.

Moral of the story: Come up with a way to deal with your digital legacy now because passwords can’t help you in the grave.

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