One of the joys of the entire cryptocurrency world is watching centuries, nay millennia, of mistakes being made in a few mere years. We’ve had money around for millennia of course and many mistakes have been made with and concerning it. Crypto’s been around under a decade but we’ve been seeing those same old mistakes being made at warp speed.
This particular one being amusing. The CEO of an exchange and storage system has died without letting anyone else know what the password was. Thus the money, $145 million of it, is locked away with no real chance of recovery. At least if it was gold in a physical safe we’d eventually be able to drill it out. Not so with cold storage:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Cryptocurrency exchange QuadrigaCX’s 115,000 customers have lost a combined total of $145 million, after CEO and founder Gerald Cotton unfortunately passed away from complications caused by Crohn’s Disease last year. The company has less than half a million left in cash. A common practice among cryptocurrency exchanges is to store customers’ coins in cold wallets, which are offline and encrypted and can only be accessed by those who know the password. This protects them from hacking and virtual theft but does mean that the entire value of the wallet rests in the hands of those with the password. [/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]An affidavit filed by QuadrigaCX on January 31 reveals that there are 26,500 bitcoins ($92 million), 11,00 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), 200,000 litecoin ($6.5 million) and 430,000 ether ($46 million) stored on Cotton’s encrypted and inaccessible laptop.[/perfectpullquote]Yes, they’ve hired hackers to try and get it out to no avail. There’s no point in trying to guess his cat’s name or anything as that’s not the sort of password that would have been used. !Squiggle1 is more likely than that.
Perhaps the best comment on it all is this:
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How hard would it have been to write down the password, put it in a sealed, signed envelope and keep it in a safe (or bank deposit)?
Well then, why not just deal in the real thing?
How easy would it have been not to do so?
Writing down the master password would, of course, be a large risk in the system security, so it would need to be very well protected. Probably split into multiple parts, each held in several highly secure ways. And that costs money....
If you think security is expensive, how does a $145 million loss sound?
Split it into six pieces, disguised as six objects, stored in six locations. Recruit an exiled rogue part-time undercover operative to track them down.
I think you may be in breach of JK Rowling's copyright :)
Who cares? He had control of the $145m for as long as he was alive. Now he doesn't care any more. That's why it was easy for him not to bother with the time and trouble to store passwords properly.
A $145 million loss sounds like no problem for me - so long as it happens to other people after I'm dead...
Seems odd that someone with an inflammatory bowel disease that was obviously quite active decided India was a good place to go