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Bankrupt cryptocurrency platform QuadrigaCX to initiate ‘temporary distribution’ of assets.
As stated in a post by Miller Thomson on May 8, the law firm representing users of the now-defunct cryptocurrency exchange QuadrigaCX, an interim distribution of funds related to the bankruptcy proceedings is set to be arranged “in the coming weeks.”
The bankruptcy trustee, Ernest & Young, revealed the interim distribution following discussions with estate inspectors. Soon, the trustee will issue a Notice to Affected Users that will provide information about the method and process of the distribution. Miller Thomson indicated that a limited number of affected users may receive a Notice of Disallowance of Claim, indicating that the creditor’s claim has been amended or rejected during the bankruptcy proceedings.
“If you receive a Notice of Disallowance, you are entitled to contest the decision,” Miller Thomson clarified, adding:
“The initial step is to examine the reasons for the amendment or rejection and compile any necessary evidence to substantiate their claim. In this situation, the Trustee likely issued a Notice of Disallowance due to a discrepancy in your proof of claim.”
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QuadrigaCX, which was once the largest cryptocurrency exchange in Canada, declared insolvency in February 2019, shortly after the death of its co-founder Gerald Cotten in India, who took the private keys to QuadrigaCX’s offline storage systems with him. The Ontario Securities Commission (OSC) estimates that QuadrigaCX owes its affected clients approximately $160 million. In addition to the loss of access to cold storage, the OSC claims that Cotten incurred $86 million in trading losses on the QuadrigaCX platform, which were subsequently covered using users’ funds.
Since that time, bankruptcy trustee Ernest & Young has managed to recover $34.3 million in assets. “We did not identify any additional assets beyond those recognized by Ernst & Young,” stated the OSC.
Distribution of funds located in QuadrigaCX bankruptcy proceedings with amounts in Canadian dollars. Source: OSC
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