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17,000 Quadrigacx Users Seek $307M from the Failed Canadian Crypto Exchange

About 17,000 people have filed claims for refunds from the collapsed Canadian digital asset exchange Quadrigacx. Altogether, the claims, denominated in both cryptocurrency and fiat, amount to nearly $307 million.

According to a document released Tuesday by Ernst & Young, the court-appointed monitor, the bulk of the claims submitted stem from bitcoin (BTC) deposits that users of the exchange held on the platform.

More than 24,436 BTC claims worth about $219.8 million at current market prices have been filed, it said. Users are also requesting compensation in the form of bitcoin cash, bitcoin gold, bitcoin SV, ethereum, and litecoin, along with Canadian dollars and US dollars.

Quadrigacx went bankrupt in January 2019 following the alleged death of founder and chief executive officer Gerald Cotten, until now believed to have been buried together with a combined $190 million of customers’ funds. More than 115,000 customers were left in the cold after Cotten’s death.

Ernst & Young assumed control of the exchange early February of the same year, once Quadrigacx filed for bankruptcy. The accountants have so far only recovered around $30 million, say reports, mainly because Cotten kept no record of transactions and appeared to use customer funds to finance a luxurious lifestyle.

As per the latest document, all refunds will be paid in the Canadian dollar equivalent, but only after the country’s tax collector, Canada Revenue Agency, first claims its share in unpaid taxes. However, the Agency has yet to file a claim and there’s no timeline on when claimants can expect to receive their reimbursements.

Ernst & Young, which asked affected users to file claims by August 31, 2019, said it had not finished verifying the papers it received, as some contained technical errors or stated values that are not consistent with those found on the Quadrigacx database.

“The trustee notes that there are a number of proofs of claim that contain certain technical
deficiencies (i.e. proofs of claim are unsigned),” it said, adding:”…in a number of cases, the claimant has asserted a preferred claim … without any support for the preferred claim status.”

The accountants stated that “all affected user claims are unsecured claims without any preferred status.”

Claims against failed cryptocurrency exchanges have tended to take some time before they are refunded. Compensation claims against Mt.Gox are still to be paid six years down the line.

What do you think about the Quadrigacx claims? Let us know in the comments section below.

Tags in this story
Canada, Canada Revenue Agency, claims, Court trustee, Cryptocurrency Exchange, Ernst & Young, Gerald Cotten, QuadrigaCX

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