The Biggest Issue Facing Cryptocurrencies

Posted: Feb 15 2019, 5:58am CST | by , in Latest Business News


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The Biggest Issue Facing Cryptocurrencies

Last week one of the biggest issues facing the cryptocurrency industry came to the surface, and it has created worries across the market that need to be addressed immediately.

In fact, the issue is so big that if it isn’t addressed and a solution isn’t found, it could hurt the industry and its reputation forever.

A Death Caused Cryptocurrencies Worth Millions to Disappear

When the young CEO of one of Canada’s biggest cryptocurrency exchanges died, no one realized how big the implications of his death would be.

In an affidavit sent to the Supreme Court of Nova Scotia, Jennifer Robertson, the widow of Gerry Cotten, deceased CEO of the cryptocurrency exchange QuadrigaCX, explained that the company owes their customers close to $190 million, but there is no way for them to access the money.

The issue is that Cotten was the only one who had the keys to the funds kept in cold storage, and after he passed away, the funds became locked away indefinitely. In total, $137 million worth of cryptocurrencies are locked away in cold storage, and the remaining $53 million are frozen in cash at a local bank who is also putting up a fight to release the money.

According to the affidavit, Cotten’s widow has done everything she can to find a solution, but since she is unable to break into Cotten’s encrypted laptop where the keys are thought to be stored, there is nothing that can be done.

Naturally, this has caused headlines across the world and at the moment, there seems to be no solution as to how Robertson and the QuadrigaCX will get their hands on the funds they owe their customers.

The situation is the first of its kind, and it is highlighting one of the biggest issues regarding cryptocurrency trading: safety.

While cold storage and personal keys are a great way of protecting cryptocurrency funds, the lack of involvement from a central organization such as a bank or a trustee means the risk of losing millions of dollars worth of assets in the case of death is very real.

At the moment, there is no solution to this issue, and it’s up to the major players of the industry as well as the developers behind the assets to find a mutual way out of situations like this. Unfortunately, the case with Cotten has already given cryptocurrency doubters another reason to look down on the industry, and if a solution isn’t found soon, the industry’s reputation is at risk.

Is There An Alternative Motive?

When the situation revolving Cotten and his widow Robertson first came to the surface, there was no reason for anyone to doubt Robertson’s story. However, just a few days later a user on Reddit claimed to have found evidence that the funds kept in cold storage were in fact accessed by someone else that was slowly moving funds from the storage to another account.

Whether or not this is true is yet to be proven, but it further highlights the issue of not having a central body overseeing and regulating the market to avoid these situations.

Are There Better Ways To Trade Cryptocurrencies?

The only real way to avoid being one of the customers who loses their investments due to a death or a similar predicament is to trade cryptocurrencies using CFDs. Today there is a range of safe and regulated providers that offer CFDs on cryptocurrencies, and in comparison, that is a much safer option, at least for now.

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The Author

<a href="/latest_stories/all/all/2" rel="author">Luigi Lugmayr</a>
Manfred "Luigi" Lugmayr () is the founding Chief Editor of I4U News and brings over 25 years experience in the technology field to the ever evolving and exciting world of gadgets, tech and online shopping. He started I4U News back in 2000 and evolved it into vibrant technology news and tech and toy shopping hub.
Luigi can be contacted directly at ml[@]




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