Nova Scotia

QuadrigaCX founder's widow to help pay back clients of defunct cryptocurrency exchange

The widow of QuadrigaCX founder Gerald Cotten has agreed to surrender the contents of his estate and the "vast majority" of her own assets to pay back the company's jilted clients.

'I was upset and disappointed with Gerry's activities,' Jennifer Robertson says

QuadrigaCX founder Gerald Cotten died last December. His widow, Jennifer Robertson, says she wasn't aware of how he ran his business or 'his improper actions.' (Facebook/QuadrigaCX)

The widow of QuadrigaCX founder Gerald Cotten has agreed to surrender the contents of his estate and the "vast majority" of her own assets to pay back the company's jilted clients.

The online cryptocurrency exchange collapsed in January 2019 after Cotten's sudden death in December, from complications of Crohn's disease, while on his honeymoon trip to India.

A total of 76,319 unsecured creditors — virtually all of them QuadrigaCX clients — came forward to claim they were owed $214.6 million.

Cotten died with sole knowledge of passwords used to encrypt "cold wallets" — offline storage devices — of various cryptocurrencies. 

A forensic investigation revealed those wallets were empty, and that Cotten used aliases to transfer clients' funds into his own accounts.

"I had no direct knowledge of how Gerry operated the business prior to his death, and was not aware of his improper actions," Jennifer Robertson wrote in a statement released Monday by her lawyer.

"Specifically, I was not aware of nor participated in Gerry's trading activities, nor his appropriation of the Affected User's funds." 

CBC News used property records to identify $7.5 million in Nova Scotia real estate Robertson inherited from Cotten when he died. It was not immediately clear how the assets will be divested. 

QuadrigaCX referred to itself as a 'leading bitcoin exchange.'

"I have agreed to return to QCX assets that I had previously thought were purchased with Gerry's legitimately earned profits, salary and dividends," Robertson wrote. 

"I was upset and disappointed with Gerry's activities as uncovered by the investigation when I first learned of them, and continue to be as we conclude this settlement."

Robertson's lawyer, Richard Niedermayer, said the statement is the only one his client will make for now, which she called a "fair and equitable resolution for QCX and the Affected Users."

With files from Cassie Williams

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