Thursday, June 20, 2024

Crypto Exchange QuadrigaCX Ex-Users Set to Receive 13% on the Dollar in Bankruptcy Proceedings

Former customers of the defunct Canadian crypto exchange QuadrigaCX are scheduled to receive approx 13% of the total amount they had claimed.

The accounting behemoth Ernst & Young (EY) said late Friday that each creditor of the exchange will receive “13.094156% of their proven claim less the levy amount payable to the Office of the Superintendent of Bankruptcy pursuant to the BIA.”

According to the statement, QuadrigaCX owes 17,648 debtors CAD $303.1 million ($222.3 million), including Canada Post and the country’s tax collection agency, the Canada Revenue Agency (CRA).

Notably, there are 28 claims with a value between CAD 500,000 and $999,999 and 15 claims with a value greater than CAD 1 million. 15,356 other creditors owe CAD 0 to CAD 10,000.

According to the statement, the interim dividend will distribute around 87.0% of the funds currently held by the Trustee. The remaining cash will be reserved for future payments related to the administration of the bankruptcy. A final allocation will be determined and made at a later stage.

Most exchange customers had cryptocurrency assets as of the day of the company’s demise in 2019. However, their holdings were converted into the asset’s monetary value as of that date.

According to EY, users with Bitcoin claims will receive CAD $6,739.08 ($7,122.9) per coin. Users will receive CAD $223.45 ($299.45) per ether for Ethereum.

QuadrigaCX Operated a Ponzi Scheme
In 2019, QuadrigaCX filed for bankruptcy when it came to light that Gerald Cotten, the exchange’s CEO, had passed away in India under strange circumstances and had taken the sole known private keys to the wallets with him.

After the Ontario Securities Commission opened an investigation against the exchange, it was formally determined by June 2020 that Quadriga was a fraud and a Ponzi scheme.

According to the report, Cotten opened accounts using aliases and credited himself with bogus money and crypto asset balances, which he then traded with unwitting clients. It was claimed that Cotten committed fraud and that “What happened at Quadriga was an old-fashioned fraud wrapped in modern technology.”

The story has received much media attention recently and was the focus of a well-liked Netflix documentary in 2022.

While some money due to the exchange’s users will finally be repaid, sizable sums remain unaccounted.

Only $34.3 million worth of cryptocurrency has so far been collected from the estate, according to bankruptcy trustee Ernst & Young.

As per Chainalysis, a cryptocurrency tracking company, the payments were either never received or disappeared shortly in 2019. Fortune, in a statement, expressed that the true fate of the money customers entrusted to Quadriga for purchasing Bitcoin remains unknown.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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