QuadrigaCX Gets Extension to Creditor Protection Period
The judge in the QuadrigaCX case has granted another 45 days of protection against consumer lawsuits, giving the exchange time to provide information on the actual cold storage wallets.
QuadrigaCX has secured another 45 days of protection against consumer lawsuits after the judge in the case decided to extend the initial month-long period, as reported by the Globe and Mail. Affected QuadrigaCX traders are prepared to launch a class action lawsuit but will have to wait out for additional evidence. The exchange will have to finally discover the potential whereabouts of its cryptocurrency funds as no conclusive evidence of cold storage has been unearthed so far.
The protection was extended after one of QuadrigaCX’s lawyers, Maurice Chiasson, claimed the launch of a class action now would be a legal disaster for the exchange.
“I suspect we would see some lawsuits filed. Such proceedings could be filed in multiple jurisdictions. They could be conflicting. You could effectively have a free-for-all,” Chiasson was cited as saying.
Around 800 QuadrigaCX users have identified themselves and indicated intentions of hiring legal representation to seek some form of a refund. Lawyers have been tasked with building a committee of affected users, and 58 have so far volunteered to participate.
After the latest hearing, it became clear that Jennifer Robertson, the widow of deceased QuadrigaCX founder Gerald Cotten, is willing to step down as a director and give up her decision power over the future of the exchange.
The search for the funds continues. Judge Michael Wood has allowed the designated monitor in the case, Ernst & Young, to check Amazon Web Services for data on accounts held by Cotton since they may contain more information about user accounts and the movement of funds.
According to its latest report, the auditing firm failed to discover balances in the wallets presented as potentially storing Bitcoin (BTC) for QuadrigaCX. Independent research has revealed that the Canadian market operator moved thousands of BTC in the past, as well as Ethereum (ETH), but the actual storage addresses have not been found.
The decision to delay potential class action and other lawsuits angered former trader Mitch Airey, who attended the latest hearing. He believes QuadrigaCX is given too much leeway and calls for a police investigation into the missing funds.
“They didn’t have the funds that they claimed to have…We need change in industry, perhaps regulation. For the betterment of Canadian crypto, this can’t happen again,” Airey said.
QuadrigaCX had given signs of trouble such as restricted withdrawals in the past but continued to operate for about a month after the death of its founder, when the potential loss of private keys for its wallets was announced. Later, it became clear nobody knew even the public addresses of the wallets or if cold storage wallets really existed.