We almost went one whole week without a single QuadrigaCX development, but the Canadian cryptocurrency exchange has now added a few more folds to a story that has become a veritable cootie catcher. On March 13, Jennifer Robertson, one of QuadrigaCX's two directors and the widow to the exchange's deceased founder and CEO, Gerry Cotten, published a statement detailing Cotten's personal attempt to fund user withdrawals in 2018 and the exchange's change in legal representation.
According to Robertson's statement, Cotten had been "putting his own money back into QCX to fund user withdrawals in 2018 while the CIBC [Canadian Imperial Bank of Commerce] money remained frozen." CIBC froze multiple accounts opened by QuadrigaCX's payment processor, Costodian Inc., in January 2018. CIBC claimed it had been unable to determine whether the exchange or the individuals associated with the accounts owned the money. Of the $67 million that had been deposited into the Costodian Inc. accounts, 25.7 million Canadian dollars and $60,000 USD was frozen by the bank.
While Robertson does not provide any details regarding how many withdrawals Cotten personally funded, we do know that QuadrigaCX's funds were frozen for practically the entirety of 2018. It wasn't until December 3 that the exchange announced a judge had ruled in its favor and that the funds held by CIBC would be released, though they weren't made available to users looking to make withdraws until December 27.
Speaking of withdrawing, Robertson's statement also notes that Stewart McKelvey, QuadrigaCX's legal team, will be withdrawing itself from representing the exchange going forward. According to the statement, Ernst & Young (EY), the exchange's court-appointed monitor, informed Robertson of "concerns regarding a potential conflict of interest that have been raised as a result of information which has come to the attention of the Monitor since the start of the [Companies' Creditors Arrangement Act] process."
EY did not provide Robertson with details regarding what the potential conflict of interest is. In its second report, published at the end of February, the monitor noted that Stewart McKelvey was holding 1,004 of QuadrigaCX's bank drafts, totally 5.8 million Canadian dollars. The exchange needed the funds in order to continue financing its legal proceedings.