Cryptocurrency has only become a popular topic of conversation in the last few years so it may come as a surprise to learn that cryptocurrencies have been in existence for over a decade. As cryptocurrency celebrated its 10th birthday, the digital currency hit the headlines as a man died suddenly without sharing his computer password or recovery key.
Last June we explored what cryptocurrency is and how it could impact future inheritances, and now we wanted to revisit the topic as this recent case highlights what really could happen if you died without sharing the access details of your virtual wallet. If you haven’t already, we recommend reading our first cryptocurrency blog before continuing to read this one.
On the 9th December 2018, Gerald Cotten died unexpectedly at the age of 30. Gerald was the Chief Executive Officer of QuadrigaCX; a Canadian cryptocurrency exchange platform which allowed the trading of Bitcoin, Litecoin and Ethereum.
According to court documents, Gerald Cotten had sole access to the digital wallets containing more than 180million Canadian dollars (£105million) belonging to the company’s 115,000 customers. This has resulted in QuadrigaCX being unable to pay their subscribers.
It has been reported that the company’s operation was run from one main computer, owned by Gerald Cotton, and nobody else was aware of the computer password or recovery key. Gerald Cotton’s widow, Jennifer Roberston, claims that she did not have any involvement in the business whilst her husband was alive. She stated: "I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere."
QuadrigaCX closed its operation at the end of January and Jennifer Robertson filed for creditor protection on behalf of the company. On February 5th 2019, the Supreme Court of Nova Scotia issued the Order and appointed accountancy firm Ernst & Young Inc. to oversee the search for the missing funds. In a statement on their website, QuadrigaCX said: “With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company.”
This case highlights the extreme consequences of not leaving suitable arrangements for the recovery of cryptocurrency. It has not just affected the loved ones of the deceased but it has impacted the company’s 115,000 customers. Regardless of wealth, age or health, it is crucial that people understand the importance of planning ahead. Writing a Will can ensure that your estate, including any cryptocurrency, are distributed as per your wishes.
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