The stunning New York Times headline read: Crypto-Exchange Says It Can’t Pay Investors Because Its C.E.O. Died, and He Had the Passwords. New York Times (Feb. 5, 2019). The article explained that the 30-year-old CEO of the Canadian cryptocurrency exchange, Quadriga CX, had “died suddenly while visiting India.” In court filings, the company announced that it could not pay back at least $250 million to clients, because the CEO was “the only person who knew the security keys and passwords needed to access the funds[,]” which were stored in an offline cold wallet (a physical receptacle). Id. Given the unusual circumstances, some questioned whether the CEO may have faked his own death to pull off some sort of exit scam. Id.
Welcome to the brave new world of cryptocurrency, where the Quadriga story serves as a cautionary tale, warding off the faint of heart from participating in this emerging marketplace.
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