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Quadriga Exchange: The Plot Thickens

08 March 2019

The appointment of the restructuring officer was necessary given that the widow of Gerald Cotten, the exchange's late CEO, had minimal experience in how to run a crypto exchange.

Robertson has been in charge of managing the company's remaining assets and recovering any lost crypto since Cotten's death.

Millions of dollars were missing when the CEO of a crypto exchange died without sharing the passwords to his accounts. While Amazon has been forthcoming, a court order was required to address Cotten's personal account, since it wasn't created with the business named.

QuadrigaCX's court case for the retribution of funds to consumers has gone on for months, and they have already been granted a 30-day stay to protect them from creditors as they find the funds hidden amongst cold wallets.

They identified six cold storage wallets belonging to the exchange, and presumably they are the same that Cotten held keys to.

Ernst & Young said it had contacted several crypto exchanges in an effort to identify potential accounts controlled by Quadriga or Mr Cotten.

Latest update on the situation is that Jennifer Robertson is now demanding that the legal and managerial costs be repaid for the time that the exchange sought creditor protection from the Nova Scotia Supreme Court.

The accounts engaged in a "significant volume" of activity, according to EY, and the auditor wants to know whether deposits into those accounts were faked and ultimately where the $200 million has landed.

Judge Michael Wood, sitting at the Nova Scotia Supreme Court, indicated that he was okay with the extension, setting the next hearing date on April 18. The CRO will be responsible for the management of the exchange and connected companies as the recovery process continued.

Meanwhile, a lawyer representing QuadrigaCX asked the Halifax court to appoint a chief restructuring officer to represent the company and potentially oversee a future sales process.

He held "sole responsibility" for handling the $190m (£110m) his company looked after, and no other members of the Canada-based QuadrigaCX team could access the stored funds, according to Mrs Robertson. That data is now stored in the cloud with Amazon Web Services - and it's under Cotten's name, not the company's.

"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". After Gerald passed away in India in December 2018, due to Crohn's disease, the exchange is being managed by Jennifer and with her father-in-law, Tom Beazley.

Last month, BetaKit reported on QuadrigaCX's series of troubles, which have sent the cryptocurrency community into a tailspin.

Quadriga Exchange: The Plot Thickens