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

Surrey council sets new rules for Good Citizen of the Year award

Candidates have more hurdles to jump before getting nominated for the prestigious local title

White Rock funds cultural activities moved online by COVID-19

Museum, community orchestra receive production grants

EXPLORE SURREY: Tee up some adventures in the city

Also: A walk through Surrey’s public art collection

STANDING TALL: For some, B.C.’s forest industry is the best office in the world

A look at the forest sector in B.C. – and those hoping for the best – amid mill curtailments

Deaths feared after train derails amid storms in Scotland

Stonehaven is on the line for passenger trains linking Aberdeen with the cities of Edinburgh and Glasgow

DFO says 5 aggrieved B.C First Nations were consulted on fisheries plan

Nuu-chah-nulth First Nations calls response ‘a sham,’ adding DFO never incorporates their views

Friends do ‘amazing’ home makeover for retired police officer

Pitt Meadows RCMP veteran was away getting treatment for PTSD

Lower Mainland woman gives birth on in-laws’ driveway

Frédérique Gagnon new son is appropriately named after Norse trickster god

Man, 54, charged in connection with fatal attack of Red Deer doctor

Doctor was killed in his walk-in clinic on Monday

UPDATE: Two dead after fishing boat sinks off southern Vancouver Island

Shawnigan Lake-registered Arctic Fox II went down off Cape Flattery, west of Victoria

VIDEO: B.C. community rallies to save snared eagle

Revelstoke climber scales tree to save the raptor

Most Read