- A Canadian court has ordered the troubled exchange to move into bankruptcy
- The exchange owes more than $195 million to its customers
- A series of dramatic events have plagued the entire fiasco
A Bloomberg report published April 8, 2019, posits that the troubled Canadian cryptocurrency exchange QuadrigaCX is set to move into bankruptcy proceedings.
QuadrigaCX Officially Given the Go-Ahead
On April 8, 2019, a Nova Scotia Supreme Court gave the go-ahead to Quadriga Fintech Solutions Corp. to transition from court-approved creditor protection to a bankruptcy process. According to the report, this transition will help mitigate costs and facilitate the recovery of assets from creditors.
After having shuttered its business on January 28, 2019, QuadrigaCX on February 5, 2019, gained court protection under Canada’s Companies’ Creditors Arrangement Act. One of the largest accounting firms in the world, Ernst & Young was appointed as the monitor for the process.
In a report published April 1, 2019, E&Y stated that the possibilities of QuadrigaCX recovering from restructuring “appear remote” and the investigation to recover assets can be handled more efficiently in bankruptcy.
The company added that some of the benefits of moving into the bankruptcy phase would be more power to the trustee to conduct an investigation, including the right to compel production of documents and seek examination of parties under oath. Notably, bankruptcy would also allow for the sale of the exchange’s assets.
The Final Nail?
It would be safe to say that the eerie story surrounding Vancouver-based digital currencies trading platform QuadrigaCX would give any Tarantino story a run for its money.
The dramatic turn of events commenced on January 15, 2019, when the exchange announced on a Facebook post that their CEO, Gerald Cotton has passed away.
The announcement quickly created a stir in the cryptoverse as on January 31, 2019, it came to light that QuadrigaCX’s customers crypto assets worth more than $195 million were locked in cold storage wallets that could only be accessed by their late CEO.
Unsurprisingly, this shocking revelation proved to be a breeding ground for all sorts of speculations and conspiracy theories regarding the now-defunct exchange. While some customer’s blamed the exchange’s lax security measures, others suspected that the whole episode is a textbook case of an exit scam. Later, however, these rumors were put to rest when it was confirmed that exchange’s CEO had actually died in Jaipur, India.
However, the exchange’s unfortunate customers and other stakeholders are still seeking compensation for the losses incurred. The decision of the court to move QuadrigaCX into bankruptcy phase will no doubt bring a sigh of relief to the aggrieved stakeholders.
The next hearing related to the case is scheduled to take place on April 18, 2019.