Following months of financial and legal issues, major Canadian cryptocurrency trade QuadrigaCX has filed for bank protection, according to an official statement on Jan. 31.
Per an announcement about the exchange's site, the company filed an application for creditor protection in the Nova Scotia Supreme Court now according to the Companies' Creditors Arrangement Act (CCAA). As stated by PwC Canada"that the CCAA presents an chance for the company to prevent bankruptcy and permits the creditors to get some kind of payment for sums owing to them from the business."
The statement also states that on Feb. 5, the court is going to be asked to reconstruct'Big Four' auditing firm Ernst & Young within a independent third party to track the proceedings.
The filing will purportedly give QuadirgaCX"that the chance to deal with the substantial financial problems that have affected our ability to serve our clients." The firm states that efforts"to locate and protected our really considerable cryptocurrency reservations held in cold wallets" have been ineffective. As such, they have been not able to meet customer accounts or to secure services from a bank to take bank drafts.
Per Canadian information daily the Globe and Mail, QuadrigaCX had been experiencingdifficulties accessing $16.3 million of its own capital since January, once the CIBC froze five balances belonging to Jose Reyes, the exchange's owner, and its payment processor, Costodian Inc..
CIBC then asked the Ontario Superior Court withhold the funds and determine whether they belong to Costodian, the exchange, or the users who deposited the funds. The court ruled in favour of the lender, stating that the owner of the funds was not clearly established. CIBC was then obliged to pass the funds over to the Accountant of the Superior Court in order to spot the owner.
Further complicating the exchange's situation is the obvious death of its creator, Gerry Cotten. Following an statement of Cotten's passing, some users asked for proof of death, while one posited the concept that the exchange could not get the resources in cold storage, since the keys were only understood to Cotten.
Users of this platform have allegedly been unable to access or withdraw their funds for months. Some theorized whether the stage had gone insolvent before this week when QuadrigaCX appeared to be down for maintenance. One commenter submitted about Reddit,"They'll declare insolvency because of an inability to locate an appropriate bank to host an accounts and facilitate transfers.