this video was made possible by dashlane
manage your online security for free at
- link comm /r ll so what's the most
that you think you could lose by
forgetting a password for you and me
probably not very much but for a company
called quadriga CX a lost password ended
up costing them approximately 190
million dollars for reference that's
more money than six thousand one hundred
and nine average Americans will earn
combined during the entire year of 2019
imagine for a moment how the economy and
people's lives might be affected by over
six thousand people losing a full year
worth of money because one idiot lost a
password well something like that
basically just happened but how did a
mistake this enormous even start well it
kind of began with how quadriga was
founded as a company it's a Canadian
cryptocurrency exchange than until this
recent disaster was the largest crypto
exchange in Canada a crypto exchange is
basically a place online where you can
trade perp toe currencies or digital
currencies for other assets like dollars
pounds euros or yen or vice versa the
exchange charges fees on these
transactions and customers can store
their crypto currencies that they own
while they hopefully accumulate value
quadriga was co-founded back in 2013 by
then 25 year old sherrod cotton who
apparently ran Canada's largest crypto
exchange 100% entirely from just his
laptop that wouldn't necessarily be a
problem but cotton was also apparently
an extremely secretive person and only
he actually knew the password to his
computer by 2018 quadriga had 115,000
customers and all of their
cryptocurrency funds at the exchange
were stored on this stupid laptop in
either hot wallets or cold wallets hot
wallets are connected to the internet
and are mostly used for quick
withdrawals or payments with crypto
currencies and store pretty small
amounts basically like a checking
account at a bank cold wallets on the
other hand are more like a savings
account that generally store a huge
amount of crypto currencies and are kept
disconnected from the internet offline
on a hard drive on the one hand this
keeps the funds stored inside of them
safe from hackers since it's you know
offline but on the other hand it makes
them almost impossible to access if you
forget the password to the hard drive
that they're all stored on so in
December 2018 cotton apparently went to
India for a trip and died while there
due to complications from Crohn's
disease you think that before he died he
would probably tell somebody or at the
least write down the password to his
computer that was storing hundreds of
millions of dollars worth of
cryptocurrencies on it that probably
would have been the smart thing to do
but he also could have just died without
telling anybody any of that and so he
did
leaving 190 million dollars worth of
Bitcoin aetherium light point and others
trapped inside of his computer and
affecting over a hundred thousand people
across the world who couldn't access
their money anymore
Cotton's wife and heir Jennifer
Robertson appears to be leading the
company now and while she did file an
affidavit with her husband's death
certificate from the Indian government
three days after his alleged death it
took the company of quadriga itself
nearly an entire month to announce to
their customers his unexpected death and
the problem with accessing their 190
million dollars
security experts have been hired to try
and beat the laptop's encryption but so
far nobody has been successful in
breaking it further complicating things
for quadriga a lot of people think that
this entire thing sounds pretty fishy
and convenient for example why was the
entire business run from the CEOs laptop
quadriga has no offices and no bank
account which is unusual for a company
of this size why was the entire business
and operation run from a single laptop
that only one person knew the password
to the transfer of funds between the
cold wallet and the hot wallet were
always just done manually by cotton
whenever customers requested withdrawals
but why didn't he ever write anything
down or tell anybody else the password
especially right before his impending
death while in India his wife has
claimed that she searched through their
entire house and found nothing that can
help with accessing the laptop so the
190 million dollar question is was
Gerald cotton actually dumb enough to
not tell anybody else's password and
died with a secret
or did sure old cotton actually just
pull off an elaborate hoax and faked his
own death - hopefully escape with all of
the money very few people probably know
the answer to that question at the
moment and only time will tell
if you're watching this video from the
future and know the answers and let the
rest of us know down in the comments
[Music]
115,000 people may have just lost nearly
two hundred million dollars because one
guide died without telling anybody
else's password which really sucks but
it all could have easily been avoided if
he was just using - lame
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thank you for watching and I'll see you
next week for another brand new video
then