Widow of QuadrigaCX CEO Denies Hiding Assets from Crypto Creditors

Jennifer Robertson, widow of QuadrigaCX CEO Gerald Cotten, asked a judge to put a restructuring specialist in charge at the failed crypto exchange, saying her management role has brought unwanted public attention.

The full motion filed Monday by the company adds that "The independence of the CRO would ensure that the interests of all stakeholders are protected and that any alleged concerns in relation to Ms. Robertson's continued day-to-day involvement with the Companies would be addressed."

The initial stay of proceedings protecting the exchange from user lawsuits that was granted on Feb. 5 expires next week, but Quadriga says this is not sufficient time to recover any assets.

Efforts to recover assets to date have been complicated by issues pertaining to unlocking bank drafts held by third-party payment processors, which in turn have "Caused the Companies and their counsel to spend valuable time addressing those issues," according to the document.

QuadrigaCX and its court-appointed monitor Ernst and Young have at least scored one victory thus far: During a hearing last week, Nova Scotia judge Michael Wood granted an order facilitating the transfer of fiat currency holdings by third-party payment processors to EY. According to the order, which was published Monday, the Royal Bank of Canada will accept deposits into a "Disbursement Account," which will hold funds from some of these payment processors, as well as any proceeds from cryptocurrencies sold during the proceedings.

The Bank of Montreal is ordered to endorse certain bank drafts it previously issued to Billerfy, another payment processor.

Stepping back, the Canadian Imperial Bank of Commerce froze various bank accounts belonging to payment processor Costodian, Inc. and its owner Jose Reyes in January 2018 after questioning the origin of the funds in these accounts.

The funds were released in the form of bank drafts, meaning the cash itself is inaccessible until a bank endorses the drafts.

In a previous interview with CoinDesk, Reyes explained that his company was having difficulty finding a banking partner to endorse the drafts.

During Friday's hearing, attorneys for the Royal Bank of Canada, as well as the Bank of Montreal, explained that they were looking for legal protection against mismanagement or negligence concerns.