UK markets closed

Lawyers for victims of Quadriga fiasco ask to dig up dead CEO's body

Jessy Bains
Who is Gerald Cotten?
QuadrigaCX founder Gerald Cotten left thousands of investors holding the bag (Canadian Press)

When cryptocurrency trading platform Quadriga’s CEO suddenly died of Crohn’s disease in India, he took the passwords to $214.6 million worth of client money with him.

Some speculated Gerald Cotten wasn’t actually dead, but hiding out somewhere with a new identity.

Now lawyers for his victims want to explore that possibility by digging up his body.

In a letter to the RCMP, law firm Miller Thomson asked to have the body exhumed because of its clients’ large financial losses and uncertainty around Cotten’s death which “in our view, further highlight the need for certainty around the question to whether Mr. Cotten is in fact deceased.”

“Representative Counsel respectfully requests that this process be completed by Spring of 2020, given decomposition concerns,” said Miller Thomson in the letter.

Cotten died in December of 2018. Court documents show that the 30-year-old cryptocurrency exchange founder filed a will just 12 days before his death.

About 76,000 users were owed $214.6 million at the time of Cotten’s death. Ernst & Young, which was court-appointed as trustee for Quadriga’s bankruptcy proceedings, has recovered just $33 million to date.

According to a report filed in June, Ernst & Young found that Quadriga’s operating structure “appears to have been significantly flawed,” with activities largely directed by Cotten alone. Cotten was also the sole person that held the passwords to access Quadriga funds.

“As a result, typical segregation of duties and basic internal controls did not appear to exist,” the report said.

The documents also show Cotten was moving clients’ money into his own accounts. His now-widow Jennifer Robertson said she was kept in the dark about the whole affair. Robertson didn’t have access to the accounts, but has been handing over assets to help ease clients’ losses.

The Quadriga affair has been a black eye for the broader digital currency industry, which has struggled for legitimacy.

With files from Alicja Siekierska

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

Download the Yahoo Finance app, available for Apple and Android.