Thursday, June 20, 2019

Judge Orders QuadrigaCX to File for Bankruptcy

Judge Michael Wood of the Nova Source Supreme Court has ordered QuadrigaCX, a Canadian-based cryptocurrency exchange to transition into a state of bankruptcy. It will allow Ernst and Young (EY), the monitor overseeing the case to liquidate the exchanges’ assets in order to restitute to customers, reports a media outlet on April 8.

Judge Michael Wood Said Quadriga is Unlikely to Recover

Per the report, Judge Michael Wood after taking a look at the Quadriga case and their possibility of restituting customers said it is unlikely for the exchange to recover. He has, therefore, ordered that QuadrigaCX files for bankruptcy next week. It is also believed that comments from EY may have also contributed to the judge’s decision.

According to EY, “the possibility that Quadriga will restructure and emerge from CCAA protection appears remote.” EY had carried out investigations in the past and revealed that the cold store which Quadriga claims have its stored funds are empty. However, EY was able to identify some third-party processors and a cryptocurrency exchange where the company’s holdings are stored even though it is uncertain if it is significant enough to pay off some people.

Third Party Payment Processors Mandated to Release Quadriga’s Funds

Likewise, a number of these payment processors which Quadriga said hold $53 million in fiat have been contacted to make refunds. Billerfy, Costodian, and 1009926 B.C., for instance, have been given until April 18 to determine how they want to share information pertaining to their holdings to EY. VoPay, another processor has agreed to return the funds without levying transaction fees on it. Also, Alto Bureau de Change and Black Banx have been mandated to make refunds.

In line with the court’s decision, the property own by the Late Gerald Cotten, the exchange’s CEO has been preserved by the court. There are claims that the exchanges funds were misused to acquire it. Moreover, Jennifer Robertson, widow of the late CEO has her accounts frozen by the court. Only two of such accounts can be
can be operated by her and they are managed by the Bank of Nova Scotia.

QuadrigaCX Will Still be Under the Creditor’s Protection

While the exchange will declare bankrupt, they will still have creditor protection which was granted to them by the court on January 31. There are also possibilities that it will be extended on April 18, a date set for the next court hearing. The latter will ensure that Quadriga does not face new lawsuits by its customers

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