The Canadian cryptocurrency exchange is in trouble and facing legal actions; as a result, the court has ordered the exchange to pay its clients $190 million and is restricted from excessing the most of its assets.
In a sworn testimony filed on Jennifer Robertson (the widow of QuadrigaCX founder) said that the company owes its clients around $190 million in both crypto and fiat form. The exchange very recently declared that it had petitioned for creditors assurance; however, the filing itself gives more remarkable insights regarding its hurdles.
As of the end of last month, there were around 115,000 clients with balances which joined the exchange platform. In total, the company owed CAD 70 million in fiat and CAD 180 million in crypto, as per the filing.
The crypto exchange holds approximately 26,500 bitcoin, along with 11,000 bitcoin cash, 11,000 bitcoin cash SV, 35,000 bitcoin gold, around 200,000 litecoin, and 430,000 ether; hence, totaling $147 million, as per the sworn statement. The statement by the company and the public announcement did not clear which parts of the exchange’s crypto holding were frozen.
In the court affidavit, Robertson clarified that just a negligible measure of coins was put away in the hot wallet, yet details were not given. She also included that the typical way followed was that the CEO would transfer most of the coins to cold storage to protect the coins from illegal and hazardous online activities like hacking or other virtual threats.
She further said that only CEO was having the responsibility regarding the assets and coins and the rest of the employees and executives have had no fortunes getting to the crypto exchange’s cold storage wallets. Robertson also said that there is a possibility that a part of the company’s assets is being put away on different crypto exchanges.
Cotten apparently died due to a severe illness in Jaipur, India toward the beginning of December 2018. The crypto exchange declared his passing recently. The CEO apparently had the only access control or information of Quadriga’s cold storage solutions. Robertson stated that after his demise, Quadriga’s stock of cryptocurrency has turned out to be inaccessible and some of it might be lost.
She later included that she has no business records with her showing and clarifying any details related to QuadrigaCX or its associated companies. While she has Cotten’s computer device, it is of no use as it is locked and encrypted and she does not have its password or a key. Though the efforts have been made to decrypt the device, there has been a limited success.
Due to the ongoing issues, the crypto exchange had to compromise with its fiat currency holdings too. The exchange’s now-settled legal battle with the Canadian Imperial Bank of Commerce has caused issues.
One payment processing platform named Billerfy has disclosed a few issues it had with finding a banking partner, and hence, stopping the processor from releasing any assets back to the crypto exchange, and consequently, to its clients. Apart from Billerfy holding CAD 30 million, three other third-party processors are holding around CAD 565,000 (together), along with WB21 holding CAD 9 million on Quadriga’s behalf.