New Document Details Ex-QuadrigaCX Law Firm's Conflict of Interest

Law firm Stewart McKelvey had a conflict of interest because it represented both QuadrigaCX and Jennifer Robertson, the widow of the failed cryptocurrency exchange's founder Gerald Cotten.

That's according to a letter sent to creditors Wednesday from Miller Thomson, one of two law firms appointed as representative counsel for Quadriga customers by the Nova Scotia Supreme Court.

Stewart McKelvey withdrew from representing Quadriga in the creditor protection proceedings on March 13, citing a "Potential conflict" raised by other parties.

The firm said at the time it did not know what the conflict was.

According to the Miller Thomson letter, shared on Telegram and confirmed as genuine by an attorney with the firm, both the representative counsel and the exchange's court-appointed monitor Ernst & Young had issues with Stewart McKelvey representing both Quadriga and Robertson.

"Representative Counsel sent two letters to Applicants' Counsel expressing discomfort with the conflicts of interest presented by Stewart McKelvey's representation of both the Applicants and Ms. Robertson. The Monitor expressed similar concerns. We advised Applicants' Counsel that, in our view, this represented an irreconcilable conflict that needed to be addressed without delay."

Stewart McKelvey's attorneys "Eventually acknowledged the conflict," the communication added, and while it initially intended to create a proposal to address this conflict, the firm informed both Miller Thomson, Cox & Palmer and EY that it would be withdrawing as counsel for Quadriga "After repeated follow-ups."

The law firm will continue to represent Robertson personally in the ongoing matter.

Stewart McKelvey initially filed for creditor protection on QuadrigaCX's behalf at the end of January, when the exchange revealed that it could not access nearly $136 million in cryptocurrencies said to be held in cold storage wallets.

The law firm has since represented Quadriga in a number of hearings before the court until its withdrawal earlier this month.