Widow of QuadrigaCX CEO to forfeit around $12 million to Ernst & Young

Jennifer Robertson, widow of the late Gerald Cotten, CEO of crypto exchange firm QuadrigaCX, has agreed to forfeit about $12 million of her assets to Ernst & Young (EY), the agency overseeing the cryptocurrency exchange’s bankruptcy proceedings.

“In return, this settlement will allow me to move on with the next chapter of my life.”
– Jennifer Robertson

According to a report from EY this week Robertson will transfer approximately $12 million in personal assets, including cash, investments, vehicles, loans, and real estate, to EY. Under the settlement, Robertson will get to keep clothing, personal items, her wedding band, and one of her vehicles, as well as $90,000 in cash and about $20,000 from her registered retirement savings plan.

“Following the sudden and unexpected death of my husband, Gerald (Gerry) Cotten, I made every effort to assist in the recovery of QuadrigaCX assets for the benefit of affected users,” Robertson said in a statement. “I have now entered into a voluntary settlement agreement where the vast majority of my assets and all of the estate’s assets are being returned to QCX to benefit the affected users. These assets originally came from QCX at the direction of Gerry.”

In the statement, Robertson denied any knowledge of how Cotten managed Quadriga before his death. She said she was upset and disappointed with her husband’s activities revealed through the investigation. In June, it was found that Cotten used customer funds to trade crypto from his own account, on competitor exchanges. EY also uncovered that substantial amounts of those funds were used to process user transactions, fund Quadriga’s operating costs, and on many occasions, go to Cotten and Robertson.

“I had no direct knowledge of how Gerry operated the business prior to his death and was not aware of his improper actions in managing the QuadrigaCX business as outlined by the monitor in its 5th report in June,” Robertson said. “Specifically, I was not aware of nor participated in Gerry’s trading activities, nor his appropriation of the affected user’s funds.”

RELATED: Canadian Securities Administrators considering crypto “regulatory regime” by 2022

The news comes more than ten months after it was revealed that QuadrigaCX owed its clients $250 million CAD, following Cotten’s death in December. QuadrigaCX then announced it had filed an application with the Supreme Court of Nova Scotia for creditor protection. EY was appointed to oversee the search for the missing money shortly after.

In May, efforts to recover the lost cash and crypto resulted in only $28 million of recuperated assets, nearly all of which was in the form of cash. Robertson added she has made efforts to recover the firm’s assets and cooperate with EY throughout the firm’s investigation.

“I believe this settlement is a fair and equitable resolution for QCX and the affected users, which lets the trustee continue to do the business of recovering as much as possible for the affected users in an efficient way that keeps trustee and legal fees as low as possible going forward,” she said. “In return, this settlement will allow me to move on with the next chapter of my life.

The firm is currently being investigated by the Ontario Securities Commission, the US Federal Bureau of Investigations and the Royal Canadian Mounted Police’s financial crime division in Milton, Ont. The settlement is currently pending approval by the Ontario Superior Court of Justice, to which the bankruptcy proceedings were transferred last month.

Image courtesy Unsplash

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

0 replies on “Widow of QuadrigaCX CEO to forfeit around $12 million to Ernst & Young”