- QuadrigaCX lost access to $145 million of their customers’ assets after the supposed death of their CEO
- Their CEO Gerald Cotten died, leaving no instructions on how to access crypto assets held on the exchange
- British Columbia’s securities regulator says they do not have any jurisdiction over the problem being faced by QuadrigaCX
One of the latest dramas in the cryptosphere continues, with more bad news for crypto investors. According to a statement given by British Columbia’s securities regulator, it doesn’t have any jurisdiction over Quadriga.
Access to US$145 Million lost
For those who missed the memo, Quadriga is a Canada-based cryptocurrency exchange. They reportedly lost $145 million of their customers’ assets after Gerald Cotten, their CEO and founder suddenly passed away. The CEO and founder took the cold wallets’ passwords with him to the grave and left no instructions on how to access them.
As per the press release, after the supposed death of Cotten, the staff members of QuadrigaCX have lost access to a nominal fiat value of $145 million.
Securities Commission and Securities Administrators Wash their hands of the situation
Brian Kladko, a spokesman for the British Columbia Securities Commission, has shared an email statement about the issue, saying:
“BCSC does not currently have any indication that Quadriga CX, the crypto asset trading platform, was trading in securities or derivatives or operated as a marketplace or exchange under British Columbia securities laws. As such, BCSC does not regulate it.”
As a result, Quadriga CX has not been able to access to $145 million in Bitcoin and other cryptocurrencies. Since its Chief Executive Officer Gerald Cotten’s death in December, it has left 115,000 users frustrated as they would like to figure out how to get their investment back.
Canadian Securities Administrators, which is an umbrella group, published an investor alert last June. It encourages Canadians to be more cautious when it comes to investing in crypto assets in trading platforms. According to the alert, even if a platform calls itself an exchange, it may not be trading or selling securities. If this happens, the platform will generally not be subject to regulation under derivatives or securities laws.
Right now, Canadian securities regulators have not recognized any cryptocurrency exchanges as a marketplace. B.C.’s securities regulator has some oversight on Quadriga Fintech Solutions Corporation, which is the exchange owner. The commission had ordered for shares of Quadriga Fintech to cease trading in March 2016. This for failing to make required filings.
As for those who are looking for recourse, they can’t turn to the courts just yet. This week, Quadriga CX was given creditor protection in Nova Scotia Supreme Court. This will halt any legal claims against it as the firm gets onto firmer financial footing. Royal Canadian Mounted Police, Canada’s federal police agency, knows of the crypto firm. However, it hasn’t indicated whether it is investigating.
“The RCMP is aware of the allegations against Quadriga CX. We will not be providing any further information,” Sgt. Penny Hermann said in his email.