As technology continues to advance, developers are creating new ways to use new techniques and technology. Between cloud-based voice services, like Alexa and Echo, virtual assistants, like Siri and Cortana, and even digital asset exchanges in the unregulated world of cryptocurrencies.
However, amid the ongoing technological advances, programmers were left the never-ending task of increased password protection to prevent and avoid identity theft and compromised information.
While most users can unlock their personal information with security questions, three-step verification, and other security measures, customers of the digital-asset exchange Quadriga CX haven’t been blessed with such luck. In fact, over $145 million has been withheld due to password protection fail, after the CEO, and holder of the password to unlock the funds, died late last year from complications of Crohn’s disease.
According to Bloomberg, Gerald Cotten, Chief Executive Officer of Quadriga CX, was very serious about online security, as most of his equipment, emails and messages systems were encrypted. He managed all of the digital funds to avoid being compromised, reportedly moving “majority” of digital coins into a cold storage for protection.
But now, nearly two months after his death, customers’ access to their digital “wallets” has been ceased without the password. In fact, according to court documents filed in Nova Scotia, the company has been unable to retrieve $145 million in Bitcoin, Litecoin, Ether and other digital tokens, and no longer has the ability to pay out the $50+ million customers are owed.
“After Gerry’s death, Quadriga’s inventory of cryptocurrency has become unavailable, and some of it may be lost,” Jennifer Robertson, Cotton’s widow, said, adding that the company’s access to currency has been “severely compromised” and the firm has been unable to negotiate bank drafts provided by different payment processors.
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,” the firm said. “Unfortunately, these efforts have not been successful.”
In the meantime, many believe the funds have been moving, even though the firm says there is no access.