QuadrigaCX Exchange Runs Out of Creditor Protection, Bankruptcy Procedure Continues

The latest hearing on the case of the defunct Canadian exchange agreed on a payment for the monitor on the case, running up legal and accounting fees to $1.3 million.

QuadrigaCX, the exchange that closed down in January, is entering another stage as the creditor protection extension period runs out in less than a day. In the most recent hearing, the judge on the case stipulated payments for the legal and accounting experts.

The latest court decision was mostly technical, approving the reports on QuadrigaCX up to this point and the fees required. The fees will be paid from the pool of recovered funds, where around $25 million of assets was found. This leaves about $23.7 million to be distributed to creditors making claims based on the balances in their accounts.

The recovered sum, based on the research of Ernst&Young, is still a fraction of what QuadrigaCX held, with rough estimates seeing the cash and crypto losses at above $190 million.

The QuadrigaCX case showed the complexity of unraveling the operations of a cryptocurrency exchange which failed to adhere to even basic tidiness when it came to keeping either fiat or digital assets. Over the course of the investigation, only a fraction of the funds was recovered, and former traders may now seek a small redress for their losses.

As Cryptovest previously reported, there is now less than a month for traders to claim the size of their losses through a recently openedclaims form. Unlike other exchanges, QuadrigaCX did not have the promised funds on hand, and the digital assets were also siphoned away to other accounts. Ernst&Young, the monitor on the case, also reported examples of mixing personal finance and the exchange’s operations.

The QuadrigaCX exchange lost funds belonging to 115,000 reported users, with the claims form to estimate the exact number. At the time of bankruptcy, some accounts held above $500,000 equivalent, as the Canadian exchange was used to liquidate Bitcoin (BTC) and other leading assets into fiat.

The QuadrigaCX bankruptcy happened at a time of relatively low Bitcoin (BTC) prices, meaning the lost digital coin funds are even more valuable now. Initially, it was believed the funds were locked into wallets when the exchange’s owner, Gerald Cotten, died in India and left only an encrypted laptop. But later, it turned out the crypto assets were moved from the exchange’s mainwalletsand possibly liquidated through other markets.