Around 17,000 people have filed claims for returns from the failed Canadian cryptocurrency exchange, Quadrigacx.
Claims From Users Reach $307 Million
The collapsed Canadian cryptocurrency exchange, Quadrigacx, has seen over 17,000 of its users file for claims, with the total amount in both fiat and cryptocurrencies at around $307 million. Ernst & Young, the court-appointed monitor for the case, published a document on Tuesday. According to the paper, most of the claims made by users were from Bitcoin (BTC) deposits made, which are still being held on the platform.
The document revealed that users have filed 24,436 BTC claims worth about $219.8 million at the current market price. Other users have also filed for compensation in other cryptocurrencies like Bitcoin Cash (BCH), Bitcoin Gold, Bitcoin SV, Ethereum, and Litecoin. However, some want to be paid in fiat currencies, including in US dollars (USD) and Canadian dollars (CAD).
Quadrigacx’s story became popular throughout the financial world after the exchange went bankrupt following the death of the owner. The founder and chief executive officer, Gerald Cotton, was alleged to have died early last year. Cotton died with a combined $190 million of customers’ funds as he was the only one who had the password to the exchange’s cold storage wallet. Over 115,000 customers lost their funds following Cotton’s death.
Ernst & Young Steps In
In February last year, Ernst & Young assumed control of the exchange, after the company filed for bankruptcy. The accounting firm has so far recovered roughly $30 million, the report added. It has been hard for Ernst & Young because Quadrigacx and Cotton kept no record of transactions, with the CEO using customer funds to finance his luxurious lifestyle.
The latest document revealed that the refunds would be paid to users in the Canadian dollar equivalent. However, the Canada Revenue Agency will have to claim the unpaid taxes from this money before it is shared with the users. At the moment, the tax collector is yet to file a claim, which means that claimants do not currently have a specific date of receiving their reimbursements.
In August last year, Ernst & Young asked users of the defunct exchange to file claims. The accounting firm revealed that it is yet to finish verifying the papers, with some of them containing technical errors. In contrast, others have stated values that are not consistent with the amount found on the Quadrigacx database.
The document stated that “The trustee notes that there are several proofs of claim that contain certain technical deficiencies (i.e., proofs of claim are unsigned).” The accounting firm added that “in many cases, the claimant has asserted a preferred claim … without any support for the preferred claim status.” Ernst & Young further added that all affected user claims on Quadrigacx are unsecured claims that lack preferred status.
It is not surprising that the Quadrigacx case continues to drag on to this day, with not much success. Claims against failed crypto exchanges tend to drag on for years before the users get their money back. Mt. Gox, one of the first cryptocurrency exchanges to be hacked and disappear, is still paying compensation claims six years after the platform collapsed.