Lawyers of the now-defunct Canadian cryptocurrency exchange QuadrigaCX have alleged that Panama-based Crypto Capital may have been used as a “shadow bank” for the firm and could be holding some of the exchange’s funds.
Last year, the cryptocurrency industry was rocked by the QuadrigaCX scandal, which was sparked by the sudden death of CEO Gerald Cotten who passed away due to complications with Crohn’s disease – taking access to the exchange’s private keys and $190 million worth of user funds with him.
The scandal left countless victims out of pocket with no indication of how to retrieve their missing funds.
Cotten’s widow, Jennifer Robertson, was reportedly with him when he died and says she has been hounded on social media by people alleging he faked his own death to run away with customers’ money.
The incident still has no clear resolution in sight. Last week, Coin Rivet reported on the Canadian Securities Administration (CSA) telling staff to subject exchanges to greater scrutiny in the wake of the scandal.
Now, Miller Thomson – the legal firm handling the case – has alleged that Panama-based banking company Crypto Capital may have been in charge of the exchange’s funds during its final months of operation.
Crypto Capital and its executives are currently being investigated by the US Department of Justice for allegedly running an unlicensed money transmitting business.
Former co-owner of the Minnesota Vikings, Reggie Fowler, was arrested early last year in connection with the case. The authorities still want to question his partner, Ravid Yosef, whose whereabouts remain unknown.
Miller Thomson published a notice on its website this week detailing how it is investigating whether any funds from the Canadian exchange were retained by the bank.
Since QuadrigaCX’s trustee Ernst & Young has been unable to locate the funds, Miller Thomson is now asking affected users to come forward to help them clarify whether Crypto Capital held any from the exchange.
Coin Rivet has contacted Crypto Capital for a comment, but a response has yet to be received.