Ernst & Young (EY), the court-appointed monitor of now-defunct cryptocurrency exchange QuadrigaCX, states that the company should file for bankruptcy.
Ernst & Young (EY), the court-appointed monitor of now-defunct cryptocurrency exchange QuadrigaCX, states that the company should file for bankruptcy. EY’s suggestion is based on that fact that this would ease the process of refunding creditors and traders, who have their funds locked in QuadrigaCX’s wallets.
EY also states that the late CEO of the exchange Gerald Cotten has mixed his personal wallets and funs with those of the company. He could have easily abused his power to acquire assets out of the business.
„A bankruptcy would allow for the potential sale of assets, including but not limited to Quadriga’s operating platform, should it be determined to be of value and if such a sale was determined to be feasible and beneficial,“ the report reads.
The proposition that bankruptcy would enhance the funds’ recovery process does ring a bell mainly because most of QuadrigaCX’s digital assets are locked in cold wallets, which supposedly could be accessed only by now deceased Gerald Cotten. The sell-off that might follow a possible bankruptcy may result in a refund.
EY claims that third-party payment processors BillerFy and Costodian did not reply to any of the letters sent to them. The report says, “[BillerFy and Costodian] have been uncooperative with each of the requests of the Monitor and has not provided even basic information.”
According to the cash flow statement from March, neither of the above-mentioned third-party payment processors have paid the $442,786 receivables owed to QuadrigaCX. All in all, the exchange owes $135 million to 115,000 of its users.
Following the sudden passing of its CEO, the exchange shut down in January before claiming creditor protection in February.
The whole case is plagued by conspiracy theories and mysteries. For instance, the investigators uncovered a suspicious fact – well before Cotten’s death, the exchange wallets that were supposed to store clients’ funds have been drained. Not only that but QuadrigaCX co-founder and Cotten Partner, Michael Patryn, was found to have some quite criminally rich past.
All being said, it is no surprise that the crypto community has quickly turned against QuadrigaCX and buys none of its claims and statements.