Christine Duhaime of Duhaime Law, a firm based in Vancouver, suggests that Canadian crypto exchange QuadrigaCX’s troubles began sooner than the death of its founder Gerald Cotten. Duhaime was associated with the exchange when it was trying to find a regulatory footing in the country. However, later the founder went on to remove its “law and order” folks.
Cotton Dumped His Law Department
According to Duhaime, the company’s road to decline began way back in 2016 when Cotten decided against listing the company on the Vancouver-based exchange. She said:
“On that day, he terminated the professionals that were, in his mind, ‘law and order’ folks — the accountant, the auditor and me, the regulatory attorney.”
She noted that Cotten took over the operations of the company and was solely working on it at like the company had no shareholders, investors or regulatory agencies and laws governing it. She added that the company was ignorant of corporate law, anti-money law, securities law, and contract law.
Quadriga Is in Deep Trouble
QuadrigaCX owes 115,000 people about C$260 million in cash and cryptocurrency. Cotten died at the end of 2018, and the company now claims that he was the only person who had access to the company’s cold wallets. Therefore, it will be difficult for them to pay their clients. Duhaime was hired by the company in 2016 as a regulatory attorney to help the company’s securities lawyers create a statutory prospect. However, the firm was terminated after just six months.
Duhaime said that she does not know why Cotten wanted to eschew the regulatory law and claims that she did not speak to him after that. Cotten was reportedly running his business from his laptop. The company is under creditor protection since February 5, and Ernst & Young is acting as a monitor in the case to help the firm’s dealings via a court-approved creditor protection processor in Nova Scotia.
Duhaime has recently been an extortion target with a person looking for confidential and privileged information on Quadriga. The person said that they would defame the law firm on social media and also file a false criminal report. She said that the extortion is forcing people with relevant information to stay quiet and not be associated with the crypto exchange in any way. The exchange currently owes $100,000 to Duhaime’s firm.