$142 Million Worth of Cryptocurrencies Disappear Due to a Sudden Death of the CEO of a Company

Feb 13, 2019

$142 million (160 billion KRW) worth of cryptocurrencies suddenly disappeared overnight as the CEO of a company that kept the password to withdraw these cryptocurrencies just to himself died suddenly.
According to major foreign media such as Bloomberg, CEO Gerald Cotten of QuadrigaCX died suddenly due to an illness while he was traveling in India last December.
As a result, QuadrigaCX turned upside down as the password to the cold wallet that stores $142 million worth of cryptocurrencies from customers of QuadrigaCX disappeared along with the death of Gerald Cotten. It is heard that CEO Cotten, who was normally very conscious about security, kept the private key to the cold wallet to himself only.
Cold wallet indicates a cryptocurrency storage that is not connected to internet. Because it is operated offline, it can be free from possible attacks from hackers. Actually, many large cryptocurrency exchanges store assets from their customers within cold wallets.
Employees of QuadrigaCX started searching the house of CEO Cotten and tried to find the private key by hacking into his PCs and Smartphones. However, their efforts turned into failure. Corresponding accident has been made public when QuadrigaCX users filed a lawsuit regarding a delay in withdrawal of their cryptocurrencies.
Corresponding court raised the hands of QuadrigaCX users by saying that QuadrigaCX delayed withdrawal and deposit of assets without any clear announcement. As a result, QuadrigaCX filed for creditor protection to prevent bankruptcy. Assets that were stored within the cold wallet have been frozen by the court. The court proposed 30 days to fine the private key and handed over Cotten's laptop to a legal representative. If assets are not restored within 30 days, it is expected that QuadrigaCX will start selling its assets and properties. It is estimated that there are about 115,000 victims due to this incident.
This issue has drawn so much attention within global cryptocurrency industry during Korean New Year’s Day. It was ranked 26th based on popular search word within Weibo, which is a major Chinese SNS.
People searched for whether corresponding cryptocurrencies can be turned to their respective owners and what would if such incident happened to cryptocurrency exchanges that they currently use.
Some believe that QuadrigaCX issue as one of the main reasons why Bitcoin price rose sharply more than $200 on the 9th. As significant amount of Bitcoins has disappeared forever due to the loss the private key, there is now less supply of Bitcoins in the world. When Bitcoin was created, it was set up so that there would not be more than 21 million Bitcoins in the world.

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