Crypto Exchange Head Takes $137 million Cold Wallet Key to his Grave

btarunr · Feb 4, 2019

In a classic case of why businesses should have disaster mitigation plans in place, Vancouver-based crypto-currency exchange QuadrigaCX has potentially lost USD $137 million in assets (customers' money), after its founder's death. Founder and director Gerry Cotten had stored the money in an offline cold wallet on an encrypted laptop and committed its password to memory. In December, Cotten died overseas of Crohn's disease, leaving the company with no other handwritten record of the laptop's password.

Crypto exchanges tend to store assets in cold wallets either on offline computers or plain paper, to avoid the wallets getting stolen on hacked online computers. The company has hired cybersecurity firms to try and decrypt the laptop to no success thus far. Cotten's widow Jennifer Robertson in a sworn affidavit to a court said that she had not found any traces of the password in their residence despite repeated and thorough searches. QuadrigaCX in addition to the $137 million under management, also holds $53 million in disputed assets.

View at TechPowerUp Main Site

Wavetrex · Feb 4, 2019

If you ask me... this is just yet another nail in the coffin of this failed social experiment called "cryptocurrency"
But nobody asks me, so just ignore me.

mtcn77 · Feb 4, 2019

Wavetrex said:
If you ask me... this is just yet another nail in the coffin of this failed social experiment called "cryptocurrency"
But nobody asks me, so just ignore me.

How about we lock you up and throw away the key. I find it justifiably appropriate.

DeathtoGnomes · Feb 4, 2019

Wavetrex said:
If you ask me... this is just yet another nail in the coffin of this failed social experiment called "cryptocurrency"
But nobody asks me, so just ignore me.

welcome to ignore !

Deleted member 158293 · Feb 4, 2019

Per this example, Bitcoin is indeed unconfiscatable.

mtcn77 · Feb 4, 2019

yakk said:
Per this example, Bitcoin is indeed unconfiscatable.

Some were claiming its value would scale along the way with its inherent scarcity. Maybe, humans aren't that foolproof the way they are...
Is my investment any less secure if no one can reclaim it? Hold my beer...

FreedomEclipse · Feb 4, 2019

The real life 'Aeolia Schenberg'

Outback Bronze · Feb 4, 2019

Good to see the security side can actually work : )

bajs11 · Feb 4, 2019

Crohn's disease is an inflammatory bowel disease (IBD). It causes inflammation of your digestive tract, which can lead to abdominal pain, severe diarrhea, fatigue, weight loss and malnutrition.

ouch! not a good way to go

mtcn77 · Feb 4, 2019

bajs11 said:
ouch! not a good way to go

Can attest to it. He had a lot of time to reflect on his saving account.

XXL_AI · Feb 4, 2019

"lies, greed, misery" -LP

Metroid · Feb 4, 2019

cases like this makes crypto even more scarce and expensive.

TheLostSwede · Feb 4, 2019

bajs11 said:
ouch! not a good way to go

Suits your name though...

BorgOvermind · Feb 4, 2019

I can decrypt that for a 9 mil special services price, taxes not included.

yotano211 · Feb 4, 2019

I can try to decrypt it for 1mil, I dont have guarantee that it will work

64K · Feb 4, 2019

I don't know anything about encryption or if it's even possible to decrypt in this case but 137 million dollars is a lot of money. Seems like there would be some way with that much money involved.

eidairaman1 · Feb 4, 2019

This is a reason to not trust it, he never was gonna give the funds back but use them inappropriatley...

Deleted member 158293 · Feb 4, 2019

64K said:
I don't know anything about encryption or if it's even possible to decrypt in this case but 137 million dollars is a lot of money. Seems like there would be some way with that much money involved.

It's a big amount for sure, but far from the biggest dormant bitcoin accounts.

damian246 · Feb 4, 2019

So far some security guys are at it.
Its not the key whats lost but the access to his laptop.

Deleted member 158293 · Feb 4, 2019

damian246 said:
So far some security guys are at it.
Its not the key whats lost but the access to his laptop.

Seems like accessing the laptop is step 1, then they'll find out if the wallet(s) itself is secured or not. Could even be multi-signature secured which would be REALLY interesting to see them work on encryption which would be beyond banking grade.

R-T-B · Feb 4, 2019

eidairaman1 said:
This is a reason to not trust it, he never was gonna give the funds back but use them inappropriatley...

What evidence do you have for this outlandish claim, praytell?

I used crypto this year, am I a criminal too?

BorgOvermind said:
I can decrypt that for a 9 mil special services price, taxes not included.

No, you really can't. Trust me.

damian246 said:
Its not the key whats lost but the access to his laptop.

That's in cryptological terms, his drives private encryption "key," most assuredly. Plus any wallet encryption. No, that moneys gone.

CiTay · Feb 4, 2019

There are outgoing transactions happening after the alleged death and the alleged inability to access the funds. See https://medium.com/@zeroresearchpro...ysis-report-pt-1-bitcoin-wallets-19d3a375d389

Something's fishy.

XXL_AI · Feb 4, 2019

put all the gpus to generate passwords for bruteforce. problem solved.

srsparky32 · Feb 5, 2019

yakk said:
Seems like accessing the laptop is step 1, then they'll find out if the wallet(s) itself is secured or not. Could even be multi-signature secured which would be REALLY interesting to see them work on encryption which would be beyond banking grade.

you are never cracking a bitcoin wallet. the passwords are encrypted with sha256. now the odds are good that he had the password stored on a notepad file or similar because wallet passwords are really really long and complicated plus the seed recovery phrase. but if you were some person who wanted to steal somebodys wallet good luck because sha256 is 2^256 possibilities.

R-T-B · Feb 5, 2019

XXL_AI said:
put all the gpus to generate passwords for bruteforce. problem solved.

srsparky32 said:
you are never cracking a bitcoin wallet. the passwords are encrypted with sha256. now the odds are good that he had the password stored on a notepad file or similar because wallet passwords are really really long and complicated plus the seed recovery phrase. but if you were some person who wanted to steal somebodys wallet good luck because sha256 is 2^256 possibilities.

sha256 is a hash. It's not a passphrase. The encryption used to generate the wallets however is still pretty complex and even a GPU botnet would likely be unable to bruteforce it honestly, unless you somehow had one so big it's essentially impossible short of erm, being another bitcoin. Even then I'm not sure.

And besides...

CiTay said:
Something's fishy.

Seems so.

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Crypto Exchange Head Takes $137 million Cold Wallet Key to his Grave

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