QuadrigaCX Bankruptcy to Move to Ontario

The complex case of the QuadrigaCX exchange has caused the Ernst&Young Trustee to call for a movement of further hearings to Ontario.

The Trustee on the bankruptcy procedure of QuadrigaCX has called for a movement of the procedure to Ontario, for an easier process and a smaller burden on the QuadrigaCX estate. The movement of the case from the current place of hearings, Halifax, was described in the second filing on the bankruptcy procedure.

Ernst&Young pointed out that the complexity on the case and the involvement of multiple law enforcement agencies has put a large burden of requests and calls for documents, hence requiring the shift of the proceedings to Ontario for better efficiency.

The QuadrigaCX case has been investigated by the Royal Canadian Mounted Police (RCMP), and the Trustee mentions multiple other agencies. The QuadrigaCX case involves the tracking of multiple crypto coin wallets, as well as exploring the banking record of the company.

So far, the Trustee has managed to track $23.5 million based on records of the Bank of Montreal, another $5.5 million based on the data of affected users, and another small fraction of funds by processing the data of third-party payment providers. The research has failed to uncover large cold wallets belonging to the exchange, only getting access to remnants of the alleged Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) reported sums.

The next significant report and filings from the Trustee is expected in September, as the case is currently still in the phase of gathering data from affected users until the end of August.

The QuadrigaCX exchange is one of the largest exchange exits. The market stopped its services in January, although signs of trouble were seen even in December. Allegedly, the co-founder of the exchange, Gerald Cotten, died in India in December 2018, leaving an encrypted laptop that reportedly held the cold wallets for all of the exchange’s funds.

But other reports showed that the exchange did not hold large-scale cold wallets, and the funds may have been spent or exchanged. Previous Trustee reports found a lack of separation between the personal spending of Cotten and the business of the exchange.