The recent death of Gerald Cotten, the 30 year old CEO of a major cryptocurrency exchange in Canada, is raising a lot of questions. Cotten died with the only password to a digital vault storing roughly $144,000,000 worth of his clients’ cryptocurrency.
At the time of his death, most of the exchange’s holdings were stored in a digital vault know as a “cold wallet” because it is not actually connected to the internet. This makes it much more secure from the threat of an outside hacking.
However, without the password to this wallet, the exchange is now faced with attempting to break through Cotten’s ironclad security measures. Its IT experts have so far been unsuccessful - leaving the trove of digital coins unreachable by their 115,000 rightful owners and the exchange to file for bankruptcy in January of 2019.
Suspicious Circumstances?
In cryptocurrency’s short lifespan there have been several high profile cases where exchanges have been “hacked” and millions worth of digital currency have been “lost.” Many insiders don’t buy the official stories and wonder if the exchanges themselves are actually involved in the disappearances of the coins.
Cotten’s case is different in the sense that he has supposedly died, but Canadian financial authorities and independent auditors are nonetheless currently investigating the case. Some concerning facts surrounding the incident have been made available to the public.
According to an affidavit filed in a Canadian court Cotten died suddenly of complications related to Crohn’s disease while traveling in India.
The sudden death of the Gerald Cotten, the 30-year-old Nova Scotian CEO of cryptocurrency exchange QuadrigaCX has left people struggling to recover about $144 million worth of cryptocurrency from his laptop.
The fact that he suddenly passed away in India of all places immediately drew concern. Skeptics pointed to the fact that the host of a National Geographic show called Scam City was able to purchase a legal death certificate in India for only $450 USD in 2012.
Likewise, Cotten’s widow moved the couple’s Nova Scotia properties into a trust immediately following his death, leading to further speculation. She happens to be a person that has been known by three different names in her lifetime.
Lastly, Cotten’s estate planning in itself would suggest further investigation is warranted given the surrounding circumstances. Cotten signed his will on November 27, 2018 - less than two weeks before he died. His planning was comprehensive and left his wife, as executor, instructions for the complete distribution of his assets - including $100,000 for the care of his two dogs. The crypto community points out that while he apparently had the uncanny intuition to engage in comprehensive estate planning days before his untimely and sudden death, he managed to forget to include the one piece of information that would unlock his company’s vast crypto assets should he ever pass away.
Common Problem
Whether the loss of the exchange’s assets turns out to be a simple case of carelessness or something more malicious, the lesson remains the same:
From cryptocurrency to safety deposit boxes and everything in between, your family must know how to find and access every asset you own. Otherwise it could be lost forever.
There is a total of more than $58 billion of unclaimed assets from across the country held by the State Department of Unclaimed Property. Much of that massive sum got there because someone died and their family didn’t know they owned the asset.
Given this, if you own any digital currency like Bitcoin, be sure to call me to make certain these assets have been correctly included in your estate plan. Indeed, if you have any assets that might potentially be overlooked in the event of your incapacity or death, contact me now.