Think you have cryptocurrency fever? Customers at a Canadian exchange can’t get their hands on $190 million bitcoin and other forms electronic cash. That’s because the company’s head honcho died unexpectedly without sharing his password.
Gerald Cotten, CEO of crypto exchange QuadrigaCX died in December during a trip to India. The 30-year-old passed away due to complications related to Crohn’s disease, according to the company. He was reportedly the only person who knew the password to “cold wallets” where some exchange customers’ cryptocurrency was stored.
QuadrigaCX informed clients in early February that it had filed for liquidity protection “to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.”
Cold wallets are physical devices that, unlike “hot” cryptocurrency storage mechanisms, are not connected to the internet. Exchanges and other major crypto holders typically store much of their coin in cold devices, where they can’t be hacked.
“Cold wallets, by their nature, are highly encrypted and were kept off the QuadrigaCX server for security reasons,” the company said in a Q & A section of the announcement. “Gerry took sole responsibility for the handling of funds for QuadrigaCX and as such no one other than him can access the coins in the cold wallets.”
Because QuadrigaCX can’t get into the cold storage, it’s not able to access as much as $190 million in cryptocurrency the exchange was holding for its clients.
The Importance of Estate Planning
Password protection is important, but so is planning for the unexpected. Cotten’s untimely death is just the latest reminder that no one lives forever, and some of us will be gone earlier than expected. It’s vital that people plan for that possibility by considering where their assets will go when they pass away.
The good news is that there are a number of legal tools that let people make their own decisions about how their assets will be distributed, instead of leaving it up to a court. That often means using a will to streamline the complicated and potentialy drawn-out probate process in which a judge approves the distribution of assets. Or, in many cases, probate can be avoided completely by creating a living trust instead of a will. Both options allow you to clearly indicate who gets what assets when you pass away.
Speak With a Miami Estate Planning Attorney
If you or a loved one is thinking about planning your estate in South Florida, it’s important to seek to counsel of a seasoned Miami estate planning attorney. A lawyer can help you understand your rights and options in order to develop a plan that best meets your individual needs.
The Miami estate planning attorneys at Hoffman & Hoffman help people manage their assets and decide how property will be distributed in the event of their death. We are pleased to represent clients throughout South Florida, including in Ft. Lauderdale, West Palm Beach and Coconut Grove. Contact us at (305) 831-0948 to speak with an attorney.