QuadrigaCX, a Canadian cryptocurrency exchange, unveils a new chapter in the on-going series of “Where are the funds?” In this new chapter, the wife of the deceased CEO (Gerald Cotten) demands that the money spent on the legal and managerial process so far be paid back, according to a report by Bloomberg.
The platform that was well-known in the space for being the biggest exchange in Canada, made headlines across the globe after the death of its CEO, Gerald Cotten.
The official statement stated that Gerald Cotten passed away due to Crohn’s disease on December 9, 2018, in India. Soon after his death, the exchange shut down its operations, followed by an announcement that they had lost control over the cold wallets because of the unforeseen incident.
Cotten was allegedly the only person who had control of the passphrase for the cold wallets; with his death, the exchange lost all access to customer funds stored in those wallets. The exchange lost control over leading cryptocurrencies: Bitcoin, Bitcoin Cash, Bitcoin Cash SV, Bitcoin Gold, Ethereum, and Litecoin [funds of around 115,000 customers]. The total sum of these funds was approximated to be $190 million.
As the news spread across the cryptocurrency space, well-known influencers and players criticized the platform for its poor managerial set-up. Moreover, several members of the community refused to buy the story and branded this turn of events “a perfect exit scam”.
Furthermore, the platform sought creditor protection from the Nova Scotia Supreme Court, which was eventually granted. Along with this, the court also appointed one of the “big fours” in the accounting industry, Ernst & Young, to supervise the proceedings.
This was followed by a report released by EY claiming that the cold storage wallets were found empty, except for the one Bitcoin transfer that occurred last month, accounting to around $40,000. This report by the financial giant is yet to be officially addressed by the firm.
The exchange is currently being overlooked by the Jennifer Robertson [the deceased CEO’s wife], along with her father-in-law, Tom Beazley, members of the Board of Directors. For the legal process of the creditor’s protection, it is reported that Jennifer Robertson provided “interim financing”, which was around $224,212. Now, Robertson is currently looking to have this repaid with the court’s assistance as it was bought up during a hearing in Halifax.
The report by Bloomberg stated:
“A cashflow report signed by Robertson on March 1 projects C$1.1 million in disbursements from March 2 to March 8, including C$300,000 for “repayment of shareholder advances” as the biggest single amount. Other costs include C$200,000 for Ernst & Young and C$250,000 for its lawyers, C$229,842 for Quadriga’s law firm and C$17,000 for independent contractors.”
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