Cryptocurrency is hanging on
Photo By: CBC News
Brendan Derry, Business Editor
The market for cryptocurrency investors has recently taken a hit as concerns over security have risen again. Canadian exchange firm, Quadriga has reportedly lost access to approximately $145 million as the passing of their CEO, Gerald Cotten was announced as he travelled through India.
The primary issue for the company is that, at the moment, they have no way of accessing these offline wallets holding investors funds because the passwords appear to have died with their creator. Cotton’s widow has released statements about the current investigations reaffirming that she has no knowledge of the passwords and they have not been found anywhere in a physical form. There is currently a team of internal investigators attempting to hack into the laptop wallets. However, these wallets are considered incredibly difficult to access and remove contents from effectively. This means that even if some were accessed there are so many that could simply be lost forever. As an investor, this means that your funds could simply be gone. They may be completely lost without insurance as many companies will not insure a loss or theft of cryptocurrencies due to their unstable nature.
For the crypto market, this has signaled that many people are putting too much trust in companies to remain afloat and have back-up plans for every situation, such as an untimely death. This has caused fluctuations in the number of people buying and selling as some investors are choosing to cash out and move to safer business ventures that cannot be lost with a click. These currencies still hold considerable value and the market will certainly not disappear because of something like this, however people are now looking at their own trading companies and assessing whether or not they actually have responsible plans set for such a circumstance that lost Quadriga so much money. The worst part for them may be knowing that the accounts that were lost don’t mean that the money is elsewhere or that somebody has stolen it. If the wallets cannot be opened then those funds are unusable forever, as if they never existed.
It seems a bit ridiculous to leave one person with the sole knowledge to access funds without writing it on a sticky-note or something equivalent for multi-million-dollar accounts. This thought has led to an increasingly popular theory that Cotton is not, in fact dead. The primary reason for this is the location of death. The death certificate is from India and many investors have pointed out that this is a popular location for those looking to pay off doctors for falsified records and reports. It has been claimed that one can purchase a death certificate in poor areas for a few thousand dollars. This is simply a conspiracy theory at this point but it is rather suspicious. A thirty-year-old CEO dies suddenly while traveling abroad. It should also be noted that the CEO had set up his will only two weeks prior. The circumstances of the death had created this theory as investors are looking for any answer as to where their money went and what will happen next.
As for the true security of cryptocurrency and the block-chain, it is still a leading technology. Investments have fluctuated greatly based on the hype of Bitcoin and has led to many companies creating platforms based off of it. They have sought to use block-chain as a secure means of data transfer which it does very well with. The breaches in security seem to come from ignorance of threats or incompetence in companies that investors wrongly trusted. The technology will continue to be developed and companies will surely still make mistakes, but money will keep changing hands.