The Canadian crypto exchange QuadrigaCX allegedly lost access to some $195 million in crypto after its 30-year old co-founder and CEO Gerald “Gerry” Cotton died suddenly at year-end 2018 while traveling in India. QuadrigaCX’s approximately 115,000 customers have no access to their cryptos. Apparently, Cotton took the private keys to the cold wallets in which the funds were stored to the grave.
According to CCN, in its fourth report, the court-appointed Monitor Ernst & Young (EY) recommends transitioning Vancouver-based Quadriga Fintech Solutions, the exchange’s parent company, from a restructuring into bankruptcy proceedings. Currently, the company is granted protection from its creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA). Under bankruptcy proceedings, Quadriga’s crypto trading platform could be sold.
EY has discovered that Cotten may have misappropriated corporate funds.
During the course of the Monitor’s investigation into Quadriga’sbusiness and affairs, the Monitor became aware of occurrences where the corporate and personal boundaries between Quadriga and its founder Gerald Cotten were not formally maintained, and it appeared to the Monitor that Quadriga funds may have been used to acquire assets held outside the corporate entity.Fourth Report of the Monitor (link)
Consequently, an Asset Preservation Order was requested by EY to freeze the assets of Jennifer Robertson, the widow of the Gerry Cotten.