How did QuadrigaCX lost $190 million by a just losing a Password

We all wonder how does one losing a password will lead to losing a very large sum of money. Apparently the CEO os QuadrigaCX,Β Gerald Cotten has just “successfully” on that feat by not disclosing his password on his laptop.

You may also take a look on this video where it provides simpler explanation on this incident without too much technical stuff.

What is QuadrigaCX

A little bit of history before on the money losing part, QuardrigaCX is founded by Gerald Cotten, a cryptocurrency exchange based on Canada. Up until the incident, QuardrigaCX have up to 115,000 active users. Apparently, every single transaction were made solely inside his personal laptop.

So what happened?

However, all the reputation and good thoughts about this exchange just literally made it downfall when Gerald Cotten has unfortunately passed away during his trip on India during December 2018. Normally standard company might have someone to take over his place and currently QuadrigaCX is led by his wifeΒ Jennifer Robertson. However the issue comes in when Gerald’s personal laptop, which acts as the cold wallet for QuadrigaCX. A total of $140 million worth of cryptocurrency were kept inside and it was protected by a password (private key) that only Gerald Cotten only know, not even his wife Jennifer.

This leads to the users of QuardrigaCX unable to withdraw any cryptocurrency held in QuardrigaCX’s cold wallet due to no approval made by Gerald Cotten. As every single transaction must first go through Gerald Cotten’s approval as in his personal password (private key) to approve. Due to his death, it is literally dead man tell no tales.

It got worst

To made the matter worst, Quardriga has accidentally made a mistake by transfering another $500,000 (rounded off) worth of CAD on 6 February 2019. Thus increasing the total lost to a total of $190 million worth of cryptocurrency.

Currently QuardrigaCX has been taking action on this matter regarding the password issue and employed experts to solve such issue. However, users and other netizen speculates that this incident might be Gerald Cotten’s scam exit by faking his death.

Perhaps this incident might be a good lesson to everyone to make sure you keep a copy of password where only your most trusted individual have a backup password. Otherwise, you might face such incident when a large sum of money is involved.

Conclusion

Perhaps this incident might be a good lesson to everyone to make sure you keep a copy of password where only your most trusted individual have a backup password. Otherwise, you might face such incident when a large sum of money is involved.

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