QuadrigaCX representatives were granted their request for 30 days’ creditor protection by a Nova Scotia judge yesterday. This is an attempt to give the company some breathing space from angry customers, as they continue to try and unlock the wallets that hold hundreds of millions of dollars in cash and crypto.
In a day of drama and confusion, the judge ordered a 30-day creditor protection order, which allows those searching for the approximately $250 million worth of assets more time to access the funds that have been out of reach since the death of the founder and CEO Gerald Cotton. Cotton, who passed away in December last year, seemingly left no passwords for the wallets or his laptop, without which the funds cannot be accessed, leaving customers angry and conspiracy theorists raging.
Here’s an example of Quadriga’s bookkeeping. These are apparently bank drafts. According to Chiasson they are now, “Off the stove.” pic.twitter.com/yvglesMHyM
— Jack Julian (@JackJulian) February 5, 2019
New Territory Presents More Complications
QuadrigaCX’s lawyer, Maurice Chiasson, described the difficulties in dealing with a case that was unheard of in both the state and within his own legal team, stating that they were struggling to find out the identity of third-party payment companies that might hold some of QuadrigaCX’s assets. To highlight the enormity of the situation, he stated that of the $250 million total there was “up to $180 million in cryptocurrency floating around” in unknown accounts. Chiasson also added that QuadrigaCX could have access to around $30 million in bank drafts, but traditional financial institutions have made it clear they are nervous about handling those funds – as an example, QuadrigaCX had its bank account frozen with no warning in October last year.
A Long and Winding Road
The case, which has now grabbed media attention worldwide, laid bare the enormous difficulties in investigating cryptocurrencies to such a degree, where customers are pseudonymous and transactions are private. With some 115,000 customers and a quarter of a billion dollars’ worth of assets involved however, there can be no question of action needing to be taken.
According to reporter Jack Julian, who was present at the hearing and live Tweeted regular updates, QuadrigaCX’s lawyers stated that it was the exchange’s intention to “find all the wallets and make people whole” but that this day would be “far into the future”. Whether customers will wait that long before taking action however is another matter.