From Law to Lawlessness: Bits of the Untold QuadrigaCX Story

We were terminated because QuadrigaCX executed a management hard fork overnight, which started the company down a path of lawlessness.

Before we get into that, let me dispel some myths about QuadrigaCX. Our firm agreed to act for QuadrigaCX because it was subject to the oversight of several regulatory agencies across Canada.

QuadrigaCX had, at that time, four different law firms advising it on different matters, two national law firms and two specialized firms, ourselves included.

No story of QuadrigaCX is complete without understanding one more fact - six months before we were retained, it had gone through a court-approved plan of arrangement and become three companies, and as a result, it inherited a slew of new shareholders it knew nothing about.

What happened was that a person demanded, at the beginning of the ongoing creditor protection case in the Nova Scotia Supreme Court, that we give them privileged and confidential information of QuadrigaCX, failing which they would defame us on social media, cause harm to our firm and file a false criminal report against our law firm to law enforcement.

No party to the proceedings reached out to ask us for the records of QuadrigaCX in our possession, so we wrote to QuadrigaCX's attorney to let them know what documents we have to assist with the process, and offered to make them available.

People have spilled a lot of ink writing about the shareholders of QuadrigaCX. It is not accurate that there are three QuadrigaCX companies - there are four and therefore, there are four sets of shareholders.

The QuadrigaCX story is by no means over but our bit of the story ended abruptly one morning when its CEO, Gerald Cotten, made the decision that he no longer wanted QuadrigaCX to be a listed company.

From that moment onwards, Mr. Cotten solely took over QuadrigaCX and operated the exchange as if it had no investors, no shareholders, no regulatory agencies and no law that applied to it - no corporate law, no securities law, no anti-money-laundering law and no contract law.

Let me end on this note - I didn't want to write this article but I did it because customer assets held by exchanges must be subject to greater regulation and oversight, and unless we improve the accuracy of the available information by hearing from those who have factual knowledge of QuadrigaCX, to understand what allowed QuadrigaCX to be both heavily regulated yet at the same time to resile from that regulation, we won't be able to fix gaps, restore consumer trust and move the industry forward.