Get All Access for $5/mo

The Murky World of Cryptocurrency Sudden death of Canadian entrepreneur in India that has locked off millions in digital currency raises concerns about the highly unregulated sector

By Pooja Singh

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Pixabay

Canada's biggest cryptocurrency exchange Quadriga is sitting on $145 million of bitcoin and other digital assets but is not able to locate the reserves. Reason: Access to Quadriga's digital wallets—an application used to store, send, and receive digital currency—is protected by a password, which has been lost forever with the sudden death of the exchange's chief executive Gerald Cotten.

Cotten died on 9 December in India from complications of Crohn's disease. He was 30.

In court documents filed on 31 January with the Nova Scotia Supreme, the BBC reports, his widow Jennifer Robertson says the laptop on which Cotten "carried out the companies' business is encrypted and I do not know the password or recovery key".

"Despite repeated and diligent searches, I have not been able to find them written down anywhere," the affidavit states.

In a statement on its website, Quadriga said, "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. Unfortunately, these efforts have not been successful."

About 115,000 Quadriga users hold balances in their personal accounts in the form of cash obligations and cryptocurrency, according to the BBC which cites the court files.

Hack attack

The unusual case highlights the risks investors face in the unregulated world of cryptocurrencies. Security-conscious Cotten always ensured his laptop, email addresses and messaging system were encrypted, and never shared any passwords, according to the court files.

His concerns are understandable.

The past few years have been a dramatic rise and fall in the prices of bitcoin and other cryptocurrencies. What's more, digital currencies worth hundreds of millions of dollars have been hacked several times in the same number of years.

Last year the amount of stolen cryptocurrency from exchanges increased 13 times compared to last year, amounting to $2.7 million in crypto assets being stolen every day, writes Eric Larcheveque, the CEO of Ledger, in a December article published in CoinDesk.

Among the biggest hacks that happened last year was the one in Japan, which is home to some of the world's most active digital-asset exchanges. The exchange Coincheck lost 523 million NEM coins valued at about $534 million in the attack. Lon Wong, the president of NEM Foundation, described it as "the biggest theft in the history of the world".

Thinly regulated industry

Bitcoin works on the principle of being the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. This lack of central authority has presented a quandary for governments across the world, with each taking a different stance when it comes to regulating their use.

While China, for instance, is investing in cryptocurrency, the Malaysian government still hasn't made up its mind on what to do with cryptocurrencies. India, on the other hand, is reportedly mulling over the "impact that digital coins will have on the Indian rupee if they are allowed for making payments", Quartz reports.

It remains to be seen how regulators and governments will figure out what the future of cryptocurrency looks like. But one thing is clear, sooner or later the digital currency will come into the regulatory fold.

Pooja Singh

Former Features Editor, Entrepreneur Asia Pacific

 

A stickler for details, Pooja Singh likes telling people stories. She has previously worked with Mint-Hindustan Times, Down To Earth and Asian News International-Reuters. 

Starting a Business

He Started a Business That Surpassed $100 Million in Under 3 Years: 'Consistent Revenue Right Out of the Gate'

Ryan Close, founder and CEO of Bartesian, had run a few small businesses on the side — but none of them excited him as much as the idea for a home cocktail machine.

Resumes & Interviewing

6 Tips to Keep in Mind When Hiring Your First Employees

Beyond running through the usual interview questions, pick up on these clues to find ideal candidates for the job.

Business News

Looking for a Remote Job? Here Are the Most In-Demand Skills to Have on Your Resume, According to Employers.

Employers are looking for interpersonal skills like teamwork as well as specific coding skills.

Business News

'Jaw-Dropping Performance in 2024,' Says a Senior Analyst as Nvidia Reports Earnings

Nvidia reported its highly-anticipated third-quarter earnings on Wednesday.

Business News

Meta Fires Employee Making $400,000 Per Year Over a $25 Meal Voucher Issue

Other staff members were fired for the same reason, per a new report.