how billions of pounds worth of crypto assets are being lost when people die

how billions of pounds worth of crypto assets are being lost when people die

After losing his life to Crohn’s disease in India at just 30 years of age, cryptocurrency executive Gerald Cotten risks taking tens of millions of pounds worth of Bitcoin with him to the grave.

As the chief executive of QuadrigaCX, Canada’s biggest cryptocurrency exchange, Cotten was responsible for accessing thousands of Bitcoin, a cryptocurrency worth £2,600 per coin, on the company’s “digital wallets”.

But after Cotten’s death from complications of Crohn’s, a disease of the bowels, on December 9, his family and colleagues realised that the strict security measures he had adopted to guard his cryptocurrency stash left them with no way to access the company’s coffers.

The result? Nearly $200m worth of cryptocurrency has gone missing forever, as the complex string of passwords required to gain access were solely in his hands. An encrypted laptop became the nerve centre of the company’s exchange business and the company, and its many creditors and investors, are unable to gain access to his funds.

It might sound like a one-off scenario, but this is not the first instance of someone’s death wiping out their cryptocurrency fortune.

Digital currencies like Bitcoin and Ethereum are built on the blockchain, an online database that stores records of all transactions. They are designed to be extremely hard to hack into, existing on the internet or on encrypted hard drives known as “cold storage wallets”.

Source link