Late CEO Of QuadrigaCX Had Mixed His Own Funds With Exchange’s Holdings, According To Widow
The drama of the QuadrigaCX court case has continued for months, but new developments show that the separation of personal and business funds have not been quite as separate as anticipated. The legal issues with the exchange date back to January last year, at the time when the Canadian Imperial Bank of Commerce (CIBC) had frozen the fiat holdings of the company. According to CEO Gerald Cotten’s widow and executor of his estate, Jennifer Robertson, Cotten had been putting his own funds into the exchange at the same time.
A statement from Robertson had been submitted to the courts via the Stewart McKelvey law firms, which started by saying that she had “no direct knowledge” about Cotten’s overall operation of the exchange. However, she claims that he told her that he was putting his own funds into the exchange to allow user withdrawals, despite the CIBC’s freeze. She stated that she thought his actions were due to his compassion for the customers and “the best interests of the business.”
In the statement, Robertson also stated that Ernst & Young, which was appointed by the courts as the monitor for QuadrigaCX, had a conflict of interest with Stewart McKelvey. As such, the law firm would withdraw themselves from the representation of the exchange. The conflict of interest was not revealed in the statement since the widow was not provided with this information, but Robertson added that the conflict was discovered as the CCAA process began.
The exchange submitted a request for creditor protection at the end of January, stating that the $140 million stored in cryptocurrencies was in cold wallets that were left inaccessible after Cotten’s death. Without this access, the company remained unable to access the funds to reimburse over 100,000 customers. During the proceedings, the Nova Scotia Supreme Court chose to appoint Ernst & Young as the monitor, giving them the ability to oversee the efforts.
At this point, there has been some progress in the securing of fiat holdings, but there’s only a small portion of cryptocurrency that the exchange has discovered. However, one of the most intriguing discoveries has been the six bitcoin cold wallet addresses that QuadrigaCX claims to have used because they are completely empty. Some individuals have surmised that there is a chance the exchange may not have any of the missing crypto assets in any storage at all.