About 17,000 former users of the failed Canadian crypto exchange, Quadrigacx, have filed claims seeking to recover around $307 million. The claims are in crypto and fiat but most of the claims are for BTC deposits made at the crypto exchange. These claims were revealed via a document released by Ernst & Young, which is the court-appointed entity to oversee the liquidation of the exchange’s assets.
The Details of the Claims
According to the documents, the victims of the failed exchange are seeking to recover over 24,436 BTC, which would be worth around $219.8 million at current prices. Other cryptocurrencies that the victims want to be returned to them are BCH, Bitcoin Gold, Bitcoin SV, Litecoin, Ethereum, and US and Canadian dollars.
The Collapse of Quadrigacx
The Quadrigacx crypto exchange went under in January 2019 following the disappearance and alleged death of Gerald Cotton, who was the founder of the exchange. It is believed that when he died, he had in his possession over $190 million in customer deposits. Over 115,000 former users of the crypto exchange lost their funds to Quadrigacx.
In February 2019, Ernst & Young was appointed by the court to oversee the dissolution of the exchange once it filed for bankruptcy. Thus far, accounting experts at Ernst and Young have only been able to recover around $30 million worth of assets. The main reason for this was that Cotton did not leave an audit trail since he mainly operated the Quadrigacx crypto exchange from his laptop. Besides that, it appears that he spent most of the deposits from customers to support his expensive lifestyle.
It was later revealed that Cotton was a career conman who had started swindling people online while he was still a teenager. It is thus unlikely that the victims of the failed Quadrigacx exchange will ever recover all the money owed to them.
A Timeline for the Recovery of the Funds
According to the document released by Ernst & Young, all refunds to customers will be made in Canadian dollar equivalents. However, the funds to be distributed will only be what remains after the Canadian Revenue Agency claims what is owed in unpaid taxes. Thus far, the tax agency has not filed a claim for tax owed to it. There is no timeline for when victims of the collapsed exchange can expect to receive their funds.
All those affected by the collapse of Quadrigacx were requested to file their claims by August 31, 2019. The audit of the exchange is still ongoing since Ernst & Young is still verifying the documents it received. According to them, some of the documents sent to them had major technical errors or stated values that were inconsistent with what was contained in the Quadrigacx database. Additionally, some of the claimants asserted a preferred claim without supporting documents for their claim.
Once a crypto exchange fails, the recovery of funds from the exchange can take quite a long time. In some cases, it has taken over six years for victims to recover their funds.
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