The macabre and darkly absorbing tale of the late Gerry Cotten has taken yet another strange turn.
The founder of Vancouver crypto exchange QuadrigaCX – at one time the biggest crypto exchange in Canada – died suddenly in December while on a luxury honeymoon in Jaipur in northern India.
There is a growing mountain of questions about his death. And about the subsequent accounting mess that has meant $190 million is now owed to the company’s creditors, the post-death asset-selling by his new wife, and about his former business partner who, it has been recently revealed, was previously jailed for fraud.
It has all been extensively covered by Canadian and US media. As Canada’s Globe and Mail wrote, as an introduction to a lengthy investigative feature in early March, “one day, [Cotten] was on his honeymoon, enjoying the opulence of Jaipur. Twenty-four hours later, he was dead in mysterious circumstances – taking valuable secrets and cryptocurrency passwords with him to the grave. Now, his demise has left his company and industry in turmoil.”
And now Canadian attorney Christine Duhaime – who says she was hired in 2015 to be Quadriga’s regulatory attorney, to help “their securities attorney in Canada draft a statutory prospectus” – has joined the debate.
What she says, in a tale already full of movie-level drama, is surprising, to say the least.
In a report for CoinDesk entitled “From Law to Lawlessness: Bits of the Untold QuadrigaCX Story”, Duhaime says she was the exchange’s attorney until “abruptly one morning” in 2016, “when its CEO, Gerald Cotten, made the decision that he no longer wanted QuadrigaCX to be a listed company… on that day, he terminated the professionals that were, in his mind, the ‘law and order’ folks – the accountant, the auditor and me, the regulatory attorney.”
Up until then the exchange was, writes Duhaime, “I believe… the first exchange in the world to launch an R&D lab, and probably the first to develop payments tech for Bitcoin acceptance for financial inclusion…. QuadrigaCX’s vision back then was to be the first listed, regulated exchange in the world and dominate the market with superior, self-managing technology.”
Duhaime said: “QuadrigaCX had, at that time, four different law firms advising it on different matters, two national law firms and two specialized firms, ourselves included. It had a public chartered accountant who prepared financial statements of all its Bitcoin trades, its finances and customer holdings. And it also had an independent auditor from an accounting firm and it had audited financial statements.”
It went from this to Cotten reportedly running a booming business – in the Bitcoin price spike in late 2016, QuadrigaCX was reportedly carrying out daily trades worth billions – from his laptop.
According to his widow, Jennifer Robertson, that laptop held the codes to the exchange that nobody could access when he died.
“Like everyone else,” former exchange attorney Christine Duhaime wrote, “there are a lot of other things I don’t know about QuadrigaCX…. I don’t know if there is $137 million parked in a few wallets; I don’t know why the Bitcoin addresses that were supposed to be holding $92.3 million turned up empty; I don’t know why the wallet address holding $44.7 million of other cryptos can’t be disclosed; I don’t know why no law firm has applied for… an injunction to preserve assets; I don’t know why the litigation is in Nova Scotia when British Columbia Courts have jurisdiction and the witnesses and evidence are in British Columbia; I don’t know why there are… no records; and I don’t know why the shareholders haven’t tokenized the exchange and made it operational so that customers can start to recover some of their assets.”
“But I do know this,” concludes Duhaime. “I’m glad we were let go by QuadrigaCX for being one of the ‘law and order’ folks.”