Gerald Cotten, the founder of Canada’s leading cryptocurrency exchange, QuadrigaCX, has died leaving investors unable to access their digital currencies.
Mr Cotten died unexpectedly in December 2018 aged just 30 and was, apparently, the only person with the passwords needed to access investors’ digital assets.
Hilesh Chavda of UK law firm Royds Withy King, who advises private clients on their digital assets and legacies, has warned that this case highlights that investors “need to be careful when investing significant sums of money in cryptocurrencies.”
He continued: “The fact that just one individual held the key to these digital assets should have set alarm bells ringing.
“Cryptocurrencies are not regulated and consequently investors have very little protection if things do go wrong. It brings into sharp focus some of the downsides of cryptocurrencies being decentralised and investing in something that regulators and legislators have not had a chance to catch up with.”
The law firm believes its online legacy management portal, Life Safe, which was launched in Autumn last year to help people manage their digital passwords and other assets, could help in similar situations to this.
Mr Chavda explained that it “is a secure online vault where individuals can store and keep track of their personal affairs and assets,” including Wills, property deeds, and digital passwords.
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