On March 7, The Times reported on the efforts of professional services firm Ernst & Young to access the CA$180 million (US$133.9 million) in investor funds that Gerald Cotten, the late Chief Executive Officer of cryptocurrency exchange QuadrigaCX, had reportedly placed in an offline “cold wallet.” Cotten, who died suddenly in India in December 2018, was believed to be the only person who knew the password or recovery key to the cold wallet. At the behest of the Nova Scotia Supreme Court, from which QuadrigaCX sought creditor protection, Ernst & Young reviewed electronic records of funds going in and out of QuadrigaCX.
Ernst & Young reportedly has now found “that all the funds had been withdrawn in April , months before Cotten died.” It identified 14 accounts, which Cotten created using “various aliases,” that were used to trade on QuadrigaCX “and possibly to withdraw money for transfer to other exchanges” . Ernst & Young is now contacting those exchanges “to see if they can find any evidence of the money from the 14 accounts deposited with them.”
Those who entrusted their funds to Cotten – already irate that Cotten’s widow, Jennifer Robertson, this week requested reimbursement of CA$225,000 in court fees – must be both heartsick and hopeful about the Ernst & Young information. For now, they should take comfort from Spenser’s line in The Faerie Queene: “ . . . there is nothing lost, that may be found, if sought.” If their investments were transferred to other cryptocurrency exchanges or other financial institutions, those funds should be further traceable, and the individuals and entities who effected the transfers available for questioning – by both investors’ attorneys and law enforcement authorities.