Months since QuadrigaCX, the largest Bitcoin exchange firm in Canada lost access to its cold wallets, a state of confusion and counter accusations has domineered the exchange’s ecosystem.
Just recently, the firm moved to court to seek creditor protection after rumors of the exchange being sold to allow for customer compensation gained momentum. Currently, attention is being shifted towards the firm’s creditors where a potential fight is brewing amongst them.
Background of the problem
QuadrigaCX is not new to controversies. Its woes gained momentum in January 2018 when the Canadian Imperial Bank of Commerce (CIBC), froze 5 accounts believed to be “linked to Costodian Inc,,, QuadrigaCX’s payment processor and Jose Reyes-its owner” where the bank claimed uncertainties regarding ownership of the funds that surmounted to $28 Million. The firm was however able to recover a large portion of the frozen amount after the bank requested the court to take over the funds and determine its real owners.
But while the CIBC saga served as an icebreaker, QuadrigaCX attempted to rejuvenate and solder on amid turbulences in the space before its walls came down crumbling with the mega saga that saw the firm loose access to its cold wallets. In a statement published on the exchange’s official website on January 31st 2019, QuadrigaCX announced that it has filed an application for creditor protection owing to the development.
This came barely weeks after the exchange announced the demise of its CEO Gerald Cotten in a sudden twist of events that sent shock waves amongst QuadrigaCX users many of which observed skepticism the whole development hitherto. The confirmation of Cotton’s death (though vaguely) by Global Affairs Canada spokesperson Sylvain Leclerc, however, complicated the matter even further. In a statement issued to newsrooms, Leclerc said:
“Our thoughts and sympathies are with the loved ones of a Canadian who recently died while visiting India. We are providing assistance to the family at this very difficult time,” while refusing to comment more on the matter
Infighting amongst creditors
Today, a fight is brewing amongst creditors in the exchange after different classes of creditors failed to agree on a viable compensation procedure. This comes after customers who stored fiat currency in the exchange demanded compensation from the recovered assets; a move that has since been strongly condemned by their counterparts (crypto holders in the exchange). In a situation where even a full compensation is not guaranteed, lockerheads regarding who should be paid first only but worsens an already terrible situation
