Late QuadrigaCX CEO Used Personal Money to Fund the Exchange

The deceased CEO of QuadrigaCX, Gerry Cotten, had used his personal funds to keep the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term afloat while it was in a litigation process with a Canadian bank, revealed his wife.

In a statement published on March 13, Jennifer Robertson, the widow of the late the CEO, stated that Cotten used his own money to fund users' withdrawal requests in 2018 as five of the exchange’s accounts holding $216 million was frozen by the Canadian Imperial Bank of Commerce (CIBC).

“While I had no direct knowledge of how Gerry operated the business, he told me that he had been putting his own money back into QCX to fund user withdrawals in 2018 while the CIBC money remained frozen. I believe Gerry had the best interests of the business in mind, and cared for his customers,” Robertson noted.

The accounts of the exchange’s payment processing partner Costodian Inc. were frozen by the bank as it failed to identify the owner of the funds. Later, a Canadian court got involved in resolving the dispute and deciding whether the funds belonged to the exchange, the payment processor, or the 388 users of the exchange.

However, in court, the troubled crypto exchange argued that there are no competing claims made for the frozen funds and it was mistakenly frozen by the banks.

More Trouble Ahead?

Robertson further revealed that the exchange and the legal firm representing it would part ways due to a conflict of interest.

“I have been advised by Stewart McKelvey that, in light of concerns regarding a potential conflict of interest that have been raised as a result of information which has come to the attention of the Monitor since the start of the CCAA [Companies’ Creditors Arrangement Act] process, they have withdrawn from representing QuadrigaCX (QCX) and the other applicant companies in the CCAA process,” the statement read.

Earlier this month, Robertson asked the court to grant $225,000 as compensation for its legal costs from the creditors. However, the court deferred any order on the repayment.

The Nova Scotia Supreme Court also granted an extension of 45 more days to the exchange, so that it can get a hold on the missing $190 million.

The exchange recently transferred a significant amount of its crypto holdings to Ernst and Young, the court-appointed monitor of the crypto exchange, obeying the court orders.