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Law.com: What’s Next: Protocol: Cryptic Canadian Crypto CaseFebruary 13, 2019
Some $190 million Canadian dollars’ worth of cryptocurrency plus millions more in cash was apparently lost in the wake of the unexpected death of Vancouver-based digital exchange Quadriga CX’s founder, CEO Gerald Cotter. Only Cotter knew the exchange’s digital keys, which prevents clients from accessing their cryptocurrency.
“I would not expect a sophisticated exchange to manage its custody in that way,” said Steve Bunnell, O’Melveny Chair of the Data Security & Privacy practice. Bunnell added that, “One of the typical solutions is a multi-signature wallet, which you can think of as a safe deposit box with more than one key and any three of the five, say, you can open [it with]. Here we have the single key, or password with one individual. It highlights the need of dealing with people who know what they are doing and as the industry matures there will be more widely accepted best practices that will become market standards.”