The sudden death of a tech entrepreneur in India has caused commotion among digital currency investors who held accounts at the QuadrigaCX exchange of Vancouver, Canada. According to recent news reports, QuadrigaCX is not a regulated financial entity under the oversight of the British Columbia Securities Commission, thus leaving clients with little recourse in relation to accessing money in their accounts. The problem with QuadrigaCX is that most of its funds are kept in what is known as cold storage, which means that the digital currency wallets of clients are not online. In this case, the storage medium is a laptop that belonged to Gerald Cotten, the exchange founder and financial officer, who passed away in December while traveling in India. Cotten was the only person known to have knowledge of the password and encryption keys needed to access the cold storage laptop where $146 million worth of cryptocurrencies, including Bitcoin, are currently stuck. It so happened that Cotten drafted and executed a will before leaving for India; he named his widow as the sole heir and executor of QuadrigaCX digital assets, but he did not mention any passwords or encryption keys. As can be expected, some QuadrigaCX clients claimed that Cotten faked his death for the purpose of locking clients out of their accounts and stealing their crypto tokens, but a death certificate has been in fact issued by health officials in the Indian state where he suffered complications from Crohn's disease. In Canada, his widow has allegedly been the subject of death threats. In the past, the QuadrigaCX exchange has run into legal issues related to one of the payment processors used by the company. That issue was litigated in Superior Court and settled in favor of QuadrigaCX. The situation with QuadrigaCX has brought renewed attention on the use of cold storage for digital assets. While many people believe that offline storage is safer than online cryptocurrency wallets, estate planning is being overlooked in this regard. Hardware wallets that feature physical means to unlock them are generally preferred for individuals, but they should also think about what would happen to their passwords if they die.
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