Justice Michael Wood: Do not grant Quadriga an extension on their CCAA protection
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Dear Honorable Justice Wood,
We write this petition to voice our objection to Ms. Robertson's Second Affidavit motion to appoint a Chief Restructuring Officer. We have found inconsistency in Ms. Robertson affidavit; and have strong reasons to believe that neither, she or any one she recommends, is acting in the best interest of the Companies and its affected users, nor to be telling the entire truth. To simply quote professor Emin Gün Sirer of Cornell University “The Quadriga story doesn’t make sense” as constituted.
Our reasoning is based on the following:
Inconsistencies on her Affidavit
In her affidavit(Hfx No 484742) submitted on January 31st 2018 she stated “I was not involved in the business of the Companies while Gerry was alive” (page 10, paragraph 52)
Yet The Chronicle Herald stated “Another user received three similar deposits from Robertson Nova in late 2016 and early 2017, and a third user received an Interac e-transfer from an “RNC Inc.” in March 2017 with an email address attached to the name Jennifer K.M. Robertson”
On her affidavit Ms. Robertson stated that the hot wallet’s contain 154.12008035 BTC and she uses the date of January 18th 2019 as the anchor for her balance.
The hot wallet Address she provided in Tab “O” of the same affidivit is “3N8auHdN9rtmHDHqNnXK4eWhfukBAQcve1”
However Address “3N8auHdN9rtmHDHqNnXK4eWhfukBAQcve1” had only 1 transaction in its history for 0.87987718 BTC and that transaction occurred on January 30th, not January 18th.
Not acting in Urgent Matter
On January 22nd , merly 44 days after Gerald’s cotten’s death, Jennifer Robertson filed court hearing on behalf of the estate to appoint new directors for the Company.
In her petition, S-190709, she states “a meeting must be held as quickly as possible to elect new directors” page 4 paragraph 9.
She continues to state “This application has been brought to the court as quickly as possible given the extraordinary circumstances” page 4 paragraph 11.
In those 44 days Ms.. Robertson managed to sell Mr Cotten’s Assets, according to the Globe & Mail and Chronicle Herald.
In those 44 days she also managed to allocate all the real estate belonging to herself and Cotten’s estate to Seaglass Trust, which lists Robertson as a trustee. Chronicle Herald, Yahoo and CBC
While asking everyone to not reveal Mr. Cotten’s death to the public. Globe & Mail
A direct consequence of her action cost thousands of users to deposit millions of dollars into Quadriga, which they cannot access anymore.
Deception by Quadriga
“Hot wallets are consistently being refilled, there has been higher demand for crypto that has caused these delays. They are going out in sequence and we are working on improving these timelines.” -- Aaron Mathews January 16, 2019
This directly contradicts Ms. Robertson affidavit that only Gerrald Cotten(who died on December 8th, 2018) was able to refill the wallet as he is the sole person to access the cold wallet
“As soon as the funds are released, we estimate 1-2 weeks for everything to arrive and all payments being back on schedule.”--Gerald Cotten, December 5, 2018
This contradicts Ms. Robertson Affidavit that $40 million in CAD is missing.
“We don't hear about successful withdrawals very much but we have been sending out between $500k and $1.2M daily for the past 2 weeks” -- Alex Hanin December 20, 2018
This number appears improbable as Quadriga did not have any access to its fiat nor its cold wallet since Mr Cotten’s death on December 8th 2018.
Either these statements show that Ms. Robertson Affidavit was not accurate, or Quadriga had a systematic use of deception to tell a story that is far away from reality.
Contradictory Statements to expert’s beliefs
Despite Ms Robertson Affidavit that Quadriga’s cold wallet containing 26488.598 BTC and 429966.0131 ETH, multiple chain analysis expert have failed to” find any cold wallets ... Instead, Quadriga was moving Ether to larger exchanges through mid-January At the same time, the patterns could mean that the exchange had set up automatic transfers to larger exchanges when its wallet balances reached a certain amount, or, alternatively, that ‘there’s some fishy business going on’” as reported by Fortune and Bloomberg.
“If the only copy of keys is on Cotten's personal laptop which is now locked and strongly encrypted/passworded, they're pretty much gone. However, it's likely that the laptop is a red herring and if the coins were there, we would not be in this situation to begin with.” --Jesse Powell, CEO of Kraken Exchange
In her Affidavit Ms. Robertson states “ I believe Quadriga’s trading platform may have significant value” Paragraph 76, page 14
Yet Jesse Powell, CEO of Kraken Exchange, stated:
“sorry to say but this business is worth next to nothing.
-liabilities sky high
-client funds gone and we don't know really when or why, therefore
---technology cannot be trusted (and is said to be largely outsourced)
---employees cannot be trusted (at least until more investigation is done)” --Feb 3, 2019
Cold Wallet’s Keys Story Not Being Consistent
“Gerry manually controlled the flow of coins between the hot and cold wallets” Paragraph 24h, page 4
“The Monitor understands from Management that the inadvertent transfer occurred due to a platform setting error by the Applicants that resulted in bitcoin being automatically transferred to the Quadriga cold wallets. “Page 4 of the 2nd Monitor Report. This directly contradicts the reports that the movement was done manually.
Moreover the wording implies that only Gerry has the password and key to the cold wallets.
Yet Mr. Cotten “spoke to Quadriga’s security strengths, noting that the exchange uses multi-signature cold storage to secure bitcoin holdings” --CoinDesk, Feburary 2015
Given the above, we do not have confidence that Ms. Robertson, nor anyone she recommends will be a credible source nor have the affected user’s best interest first. Furthermore, we contend that there is no need for a CRO as the company has no physical location, no active employees, no business, no books and no prospect of resuming operations nor of finding a buyer. Therefore we respectfully ask you to take this objection into consideration and reject her motion.
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