The news of QuadrigaCX seeking bankruptcy protection from the Canadian government made waves in the cryptocurrency community last month. Following the death of CEO Gerald Cotten, the team came to the realization that the company’s entire reserves were held in inaccessible cold wallets, and no other choices remained.
The cost to file under the Companies’ Creditors Arrangement Act (CCAA) was borne by the Cotten’s widow, Jennifer Robertson. Now, much to the chagrin of the company’s creditors, Robertson is seeking repayment of that 300,000 CAD cost.
The filing with the CCAA put a temporary halt to the onslaught of requests for repayment by those affected by the event. Estimates indicate that as much as 260 million CAD worth of digital assets have been lost, while only 24.7 million CAD has been offered as a repayment pool.
With such skewed numbers, it is no surprise that creditors are now up in arms about requests for early repayment to Robertson. Her funds, originally labeled as ‘interim financing’, were part of a request for early repayment to be made sometime between March 2nd and 8th. Other costs included in the request are related to the payments of lawyers and fund managers.
While the eventual repayment of Robertson’s funds is likely, creditors are upset that she is included in the early payment requests. Other creditors must wait until the court’s protection of the company ends on April 23.
Creditors are concerned about the source of the original 300,000 CAD payment. Because Robertson’s funds were not originally sourced, they could be part of the losses which creditors have suffered. Creditors have stated that the repayments should not occur until the losses were better understood. According to Bloomberg, the legal representatives for the creditors stated:
“We are concerned about the repayment by the applicants of 300,000 CAD to Ms. Robertson in the first week of March contemplated by the filed cash flow projection. The repayment contemplated by the cash flow is inappropriate until such time as the monitor has reviewed the requested information and satisfied itself as to the source of funds used to fund the CCAA proceeding.”
In spite of the uproar, Robertson’s lawyer has declined to comment.
The circumstances surrounding Cotten’s death and the subsequent loss of Quadriga’s reserves have grown increasingly suspicious over the course of the past few months. The initial reports of lost cold wallet private keys have been followed-up by widespread concerns that the funds are simply lost forever.
Cotten did explain the company’s strategy well before his untimely death, yet concerns remain. Experts have had great difficulty tracing the transactions that would have placed the funds in the cold wallets in the first place. In another twist that has caused substantial concern, the supposed cold wallets were themselves showing no record of activity on the blockchain for at least six months.
While the events surrounding the loss continue to unfold, it is no surprise that creditors are unwilling to reimburse Robertson. Until the lost coins and tokens are located, or the source of Robertson’s funds are disclosed, such repayments will make for a messy situation.
Do you think Robertson deserves to be repaid, or should she wait like the other creditors? Let us know your thoughts in the comments below!
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