QuadrigaCX Exchange Founder Was Funding The Exchange With His Own Held Money.

QuadrigaCX Exchange Founder Was Funding The Exchange With His Own Held Money.

2019-03-14 | Selina Mathew

QuadrigaCX Exchange Founder Was Funding The Exchange With His Own Held Money.

The founding father of renowned Canadian cryptocurrency exchange QuadrigaCX, named ‘Gerry Cotten’, was supposedly funding the exchange with his own money while it had been in legal proceeding with a significant Canadian bank. Cotten’s wife ‘Jennifer Robertson’ revealed details regarding the exchange’s financial affairs in a recent statement 'published'.

The 'statement' added that Cotten was investing his own money into QuadrigaCX to fund user withdrawals earlier last year in 2018, once the CIBC [Canadian Imperial Bank of Commerce] 'froze' 5 accounts holding $21.6 Mln. 

Explaining further Robertson added:

“While I had no direct information of how Gerry operated the business, he told me that he had been investing his own money into QuadrigaCX to fund user withdrawals earlier in 2018 while the CIBC Money remained frozen. I think Gerry had the best effective interests of the business in mind, and cared for his customers.”

At the reporting time, the CIBC froze accounts belonging to the exchange’s payment processor named ‘Costodian Inc’, along with its owner, ‘Jose Reyes’, supposedly due to an inability to spot the funds’ owners. The CIBC then requested the court to withhold the controversial funds and thereby decide whether or not they belong to QuadrigaCX, Costodian, or the 388 users who had deposited the funds.

Quadriga afterwards told the court that the bank froze the funds erroneously, and claimed to be the undisputed owner of the bigger part of the funds as there was “no evidence” of competitory claims.

In the earlier statement, Robertson additionally revealed that the legal firm presently representing the exchange can stop its association with QuadrigaCX, apparently because of conflict of interests. The statement further adds:

“I have been advised by Stewart McKelvey that, in light of issues concerning a possible potential conflict of interest that have been raised as a result of info that has come to the eyes of the Monitoring since the start of the 'CCAA' [Companies’ Creditors Arrangement Act] process, they have withdrawn from representing QuadrigaCX [QCX] and therefore other applicant corporations within the CCAA process.”

Even earlier in March, Robertson asked court for $225,000 USD in compensation for legal prices for financing used to facilitate the 'cryptocurrency' exchange acquire court-approved protection from creditors. After $145 Mln in cryptocurrency assets went 'missing' following Cotten’s death, Robertson provided interim financing for the legal proceedings.

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