Just for reference:

I had the same problem on my digital ocean droplet (after a distro
upgrade).

Problem solved after upgrade the kernel in the digital ocean
administration site. More details you can see here[1].

In my case the upgrade was from 3.x to 4.x serie.

[1] https://www.digitalocean.com/community/tutorials/how-to-update-a
-digitalocean-server-s-kernel

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https://bugs.launchpad.net/bugs/1577926

Title:
  apt-key works fine, yet apt fails with "Could not execute 'apt-key'"

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