Deceased Quadriga’s Founder Reported to Have Stored Customers’ Private Keys Offline in Safety Vault
Justice Michael Wood of the Supreme Court of Nova Scotia has ordered the Canadian law firms of Miller Thomson and Cox & Palmer to represent aggrieved customers of cryptocurrency exchange firm QuadrigaCX in subsequent proceedings.
The court’s ruling was announced in a filing published on the 19th of February.
The decision directs that the law firms will act as lead counsel to the representative committee of users of Canada’s major cryptocurrency exchange firm Quadriga.
The filing enumerated specifically that the representative counsel will be responsible for
“managing communications with users; acting as user liaison for the monitor [Ernst & Young]; advocating for user interests before the court; identify[ing] potential conflicting interest amongst users, and advocating for user privacy.”
According to the filing, the court held that the proceedings should focus more on efficiency and cost-effectiveness and that the Counsel should refrain from open-ended retainers and undertakes inquiries only where they can exact fees from the exchange’s assets.
The filing further explains:
“Representative Counsel can make the proceeding more efficient and cost effective for all parties by providing a clear mechanism for communicating with the stakeholders and avoiding a multiplicity of potentially conflicting retainers.”
While the court’s next hearing is slated for the 5th of March, 2019. Justice Wood affirmed in the filing that he “expects that the representative council, the Monitor and the Applicants (Customers) should have been able to reach an agreement on most, if not all, of the terms of the order which could then be tendered to the Court for consideration.
Justice Wood’s decision is sequel to an earlier hearing of the court on the 14th of February, when the Nova Scotia Supreme Court merged more than 12 lawyers who were vying to represent the over 115,000 cryptocurrency traders being owed about $260 million ($195 million) by the cryptocurrency exchange firm.
It will be recalled that on the 13th of February, 2019 it was reported that Ersnt & Young’s recently released report titled “First Report of the Monitor” revealed that on the 6th of February, 2019, Quadriga had unknowingly transferred 103 bitcoins valued at about 468,675 dollars to its cold wallets.
And the firm has ostensibly been unable to access the cold wallets owing to the demise of its founder, Gerald Cotton who is reported to be solely in charge of the wallets and their corresponding offline keys.
Gerald Cotten’s died in India last year under circumstances that have been termed ‘mysterious’. Before his death, his profile on Bloomberg revealed that he had been president of Quadriga CX since the 5th of February, 2015 though he was previously registered as the CEO of the company since 2013. It also cited that Cotten, who graduated from the Schulich School of Business at the New York University, in Toronto, has 11 years of digital currency experience