The most infamous saga that shocked the crypto world continued when the government-appointed monitor for Quadriga CX, Ernst & Young said that they were already able to locate $400,000 worth company assets. The monitor also suggests that at this point, the best course of action for Quadriga is to file for bankruptcy.
The highly covered story of the predicament faced by Quadriga started when the chief executive officer, Gerard Cotten, died in December under mysterious circumstances in India. The CEO had left his company with nothing after he was unable to surrender the passwords and encryptions keys, as well as other digital assets of the company before he died.
Cotten left his company with a $200 million debt from 115,000 users of the crypto exchange company. The online startup that handles cryptocurrencies of thousands of its clients cannot retrieve $145 million worth of digital money in Bitcoin, Litecoin, Ether, and other digital tokens. The company also said that the Vancouver-based Quadriga CX could not pay C$ 70 million it owes. Quadriga CX’s directors posted a notice on the firm’s website on Jan. 31 that it was asking the Nova Scotia court for creditor protection while they address “significant financial issues” affecting their ability to serve customers.
In the latest twist in the infamous story, evidence subsequently revealed that the company faced financial difficulty before Cotten’s death and that most of the money simply doesn’t exist. Recent reports confirmed this speculation but also said that monitoring company found $400,000 worth of the company’s assets.
Ernst & Young argues that the most viable option for QuadrigaCx is to file for bankruptcy. Bankruptcy would allow the company’s asset to be sold to recover some of its lost funds. Furthermore, the monitoring company discovered that payment processors and other businesses that had been in contact with the company may have company assets in them and that they could be recoverable.
POSConnect, a payment processing company, confirmed that it owes Quadriga $300,000, but said that the money would not be accessible until April 28, 2019. Similarly, VoPay, a money transfer company, is believed to possess $116,000 of the missing Quadriga funds. However, the report also revealed that VoPay would not make the money available unless it’s granted indemnity from liability, which E&Y is unwilling to do.
A Swiss bank named WB21 used to hold Quadriga’s money in 2017 and now, the bank said that it could not establish who the money belonged to. Reports believed that WB21 has $9 million of the missing Quadriga funds. However, the company said that Quadriga only owns $14.
“WB21 has been uncooperative with each of the requests of the monitor and has not provided even basic information,” the report said.
E&Y has already requested legal support from the courts to pressure WB21 to give them access to their documents.
A special committee is helping victims recover their lost money
A new steering committee has been appointed by Canadian law firms Miller Thomson and Cox & Palmer to guide the unfortunate customers of the failed cryptocurrency exchange company, QuadrigaCX, in their legal battles to recover their investments and cryptocurrency balance from the crypto exchange. The committee will potentially represent around 115,000 customers.
The Canadian law firms filed a court notice on March 19. Miller Thomson announced that it had selected its Official Committee of Affected Users. The committee that covers QuadrigaCX’s former customers who are affected by its financial problem will guide the law firm’s work as Quadriga and its court-appointed monitor, Ernst & Young (EY), try to recover the exchange’s multi-million dollar funds that were missing following the mysterious death of Quadriga’s CEO last December.
The online startup that handles cryptocurrencies of thousands of its clients cannot retrieve $145 million worth of digital money in Bitcoin, Litecoin, Ether, and other digital tokens. The company also said that the Vancouver-based QuadrigaCX could not pay C$ 70 million it owes.
QuadrigaCX’s directors posted a notice on the firm’s website on Jan. 31 that it was asking the Nova Scotia court for creditor protection while they address “significant financial issues” affecting their ability to serve customers.
The quandary has also involved the FBI, and the RCMP as the two law enforcement agencies from the USA and Canada have launched their joint investigation on what happened with Quadriga’s funds. With all the twists and turns of the story of QuadrigaCx and its missing funds, the world is reminded of the dangers of unregulated economic systems and the horrors of corporate bureaucracy.