Widow of QuadrigaCX founder to hand over most assets in settlement

Online exchange, which launched in 2013 and grew to become one of Canada’s largest with 363,000 customers

The widow of the founder of QuadrigaCX has agreed to hand over most of her assets in a settlement reached as part of bankruptcy proceedings for the now defunct cryptocurrency exchange.

The settlement says Jennifer Robertson and the estate of her late husband, Gerald Cotten, are to return about $12 million in assets to help repay users of the exchange. Those assets include properties in Nova Scotia and British Columbia, a small aircraft, “luxury vehicles,” a sailboat, investments, and cash, along with gold and silver coins.

The funds are only a fraction of the $214.6 million in cash and cryptocurrency that more than 76,000 unsecured users have claimed following the collapse of the exchange after Cotten’s death last December.

The online exchange, which launched in 2013 and grew to become one of Canada’s largest with 363,000 customers, offered a platform for trading and storing digital assets like Bitcoin, Litecoin and Ethereum.

The exchange was already facing liquidity issues before the death of Cotten, who was chief executive and sole director, but employees found they were unable to locate or access most of the cryptocurrency assets after he died.

An investigation by creditor monitor Ernst and Young found the exchange had flawed financial reporting and that significant volumes of cryptocurrency had been transferred to personal accounts controlled by Cotten. It found losses from trading and fees in those accounts affected QuadrigaCX’s reserves, while Cotten also created fake accounts on QuadrigaCX to inflate revenue figures.

Robertson said in a statement that she wasn’t aware of how her husband operated the business, or his appropriation of users funds.

ALSO READ: QuadrigaCX founder transferred customers’ funds to his own accounts: report

“I had no direct knowledge of how Gerry operated the business prior to his death, and was not aware of his improper actions in managing the QuadrigaCX business.”

The monitor said that to its knowledge, neither Cotten nor Robertson had material sources of income other than funds received from QuadrigaCX, though neither reported income from the company on tax returns in recent years.

Robertson said that she has agreed to return assets she thought were purchased with legitimately earned proceeds from the company.

“I was upset and disappointed with Gerry’s activities as uncovered by the investigation when I first learned of them, and continue to be,” she said.

Robertson will be able to keep about $90,000 in cash, $20,000 in retirement savings, a Jeep, and some jewelry and furnishings as part of the settlement.

The assets handed over by Robertson will add to the roughly $32 million in cash plus $1 million in cryptocurrency that Ernst and Young has already recovered from QuadrigaCX.

Robertson said she hopes the settlement will allow users to be repaid as much as possible while keeping fees as low as possible.

“I believe this settlement is a fair and equitable resolution for QCX and the affected users…in return, this settlement will allow me to move on with the next chapter of my life.”

Ian Bickis, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

First Energy Metals set to start gold exploration work in the West Kootenay

The work will be conducted at two of its sites near Nakusp and Nelson

Flooding: Why the RDCK ordered hundreds of properties evacuated

All evacuation orders have now been rescinded

No immediate threat of flooding in Nakusp area: RDCK official

High water levels have been reported near Burton and Edgewood last weekend

Nakusp Hot Springs campground opens to RVs today

No tenting will be permitted at the campground at this time

Evacuation orders for Duhamel, Salmo-Ymir and Crawford Creek rescinded

RDCK warns public that streams are still dangerous

If Trudeau won’t stand up to Trump, how will regular people: Singh

Trudeau did not directly answer a question about Trump’s actions amid protests

As two B.C. offices see outbreaks, Dr. Henry warns tests don’t replace other measures

Physical distancing, PPE and sanitizing remain key to reduce COVID-19 spread

Young killer whale untangles itself from trap line off Nanaimo shore

DFO marine mammal rescue unit was en route as whale broke free from prawn trap line

Racist incident shocks Vancouver Island First Nation

Port Alberni RCMP investigating after video shows truck wheeling through Tseshaht territory

Vancouver Island school principal mourns brother, cousin killed during U.S. protests

Jelks says he’s grateful for the outpouring of support from the community in the wake of this tragedy

Bank of Canada keeps key interest rate target on hold at 0.25%

Central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019

RCMP, coroner investigate murder-suicide on Salt Spring Island

Two dead, police say there is no risk to the public

B.C. schools see 30% of expected enrolment as in-class teaching restarts amid pandemic

Education minister noted that in-class instruction remains optional

Trudeau avoids questions about anti-racism protesters dispersed for Trump photo-op

Prime minister says racism is an issue Canadians must tackle at home, too

Most Read