QuadrigaCX Scandal: Withdrawals in 2018 Reportedly Paid with CEO’s Personal Funds
To keep the exchange liquid and honor withdrawal requests, Gerald Cotten has used personal funds during a time when QuadrigaCX funds were locked by a Canadian bank.
Back in 2018, the late CEO of QuadrigaCX Gerald Cotten allegedly used personal funds to honor withdrawals. At that time, the exchange was in dispute with the Canadian Imperial Bank of Commerce (CIBC), which led to the freezing of $21.6 million.
Based on a recent statement by Cotten’s widow, Jennifer Robertson, during that period, Cotten honored the exchange’s withdrawal requests through his personal bank accounts.
“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.”
Despite the claims of being dedicated to the exchange, the Monitor on the case, Ernst&Young, is still researching to discover where the alleged digital asset funds were stored. So far, the Monitor only discovered wallet addresses that were once used, but were emptied out. There is also no sign of the accounts of QuadrigaCX on other exchanges, as allegedly Cotten moved funds to prominent markets, to make use of their cold storage.
QuadrigaCX is still under extended creditor protection, while the investigation of the Monitor is ongoing. For now, traders with various losses from the exchange will have no right to seek recovery of their funds. The creditor protection was extended for another 45 days, starting this March 5.
During the trial, it also became clear that Robertson also financed part of the process, including the demand for creditor protection, as well as the hiring of Ernst&Young as auditor and monitor on the case. Robertson asked the court for compensation of the $250,000 expenses she made on the case, although the demand did not receive approval, reported Bloomberg.