Update: After the March 5, 2019 court hearing, Justice Wood has granted QuadrigaCX a 45-day stay on proceedings. He has also appointed Peter Wedlake, a Grant Thornton lawyer who is part of QuadrigaCX’s counsel, as the company’s Chief Restructuring Officer, though the judge was reluctant at first to approve the position out of cost and efficiency concerns. The court will reconvene for the next round of proceedings on April 18, 2019, while the stay extends QuadrigaCX creditor protections until April 23, 2019. Source.[1]
As QuadrigaCX’s legal counsel descends on the courtroom in Halifax, Nova Scotia, for another round of legal proceedings, the court monitor’s third report on QuadrigaCX’s finances — specifically its revelation that the exchange’s cold wallets are empty — lays out some hopeful avenues for fund recovery — and some frustrating dead ends.
QuandrigaCX has been entrenched in a solvency scandal ever since its founder’s untimely death on December 8, 2018. Gerald Cotten passed away while honeymooning with his wife, Jennifer Robertson, in Jaipur, India. According to his widow and his company, he died with the sole knowledge of the exchange’s cold storage private keys and seed phrases. The exchange filed for creditor protection on February 5, 2019.
Ernst & Young (EY) was appointed as monitor over the case, and it’s now saying that the long sought-after funds in QuadrigaCX’s elusive cold wallets aren’t there. The wallets are empty and have been for almost a year, the accounting firm writes in its third report[2] for the Nova Scotia court. It also reports that it has secured some $25 million CAD in customer funds from QuadrigaCX’s payment processing partners. Additionally, it reveals that QuadrigaCX opened 14 accounts on its own platform under various aliases, while it also held accounts (and possibly funds)
