Tags in this story
Bankruptcy, Bitcoin Cash, Bitcoin Satoshis Vision, BTC, Ernst and Young, ETH, Gerald Cotten, Litecoin (LTC), QuadrigaCX, quadrigacx fraud, quadrigacx ponzi
The trustee of the now defunct cryptocurrency exchange Quadriga CX stated that the sell-off of platform assets raised $30 million. This is in sharp contrast to the US$171 million claim made by Quadriga creditors to the trustee. Therefore, the accounting firm Ernst & Young (EY), which is responsible for implementing Quadriga’s liquidation procedures, stated that it will not be able to repay all claims in full.
As shown in a report, the trustee said: “It received complete claim forms from 17,053 creditors on the exchange, and submitted a total of 42957 claims.” The report explained that compared to the actual number of creditors. The claim is higher, and some creditors may have signed more than one claim form.
Ernst & Young also disclosed in its court motion that claims filed by users and creditors include cryptocurrency and legal tender. The proposal lists the following cryptocurrencies: 24,427 BTC, 7,723 Bitcoin Cash, 17,934 Bitcoin Gold, 7,098 Bitcoin, 65,457 Ethereum and 87,031 Litecoin.
Ernst & Young still believes that “approximately one-third of the forms are defective,” and the accounting firm said that the cost of “not being able to follow up and repair” will be too high. Therefore, the trustee hopes that the court will rule on its claims to evenly distribute the available funds.
The trustee said in the request:
EY requires users to have an equal position in their claims, because it determines who will give priority to distribution based on the claims made on a case-by-case basis, which will lead to inefficiency, high costs, and a large consumption of assets that could be used for distribution.
At the same time, Ernst & Young’s motion seems to confirm the long-term allegations against Kraton. The bill explains the difference between Quadriga’s assets and liabilities and explains:
“Mr. (Gerald) Cotten started trading these account balances with affected users who have deposited real assets. Therefore, Quadriga’s assets are likely to be inconsistent with the debts due to affected users.”
After there was no requirement to transfer or retrieve the private keys of exchange cold wallets, Kraton’s death in December 2018 caused controversy. The exchange closed a month later, leaving thousands of users in trouble.
Now, after nearly two years of waiting, Quadriga CX users and creditors are now expected to receive part of the funds.
What are your thoughts on the compensation provided to Quadriga CX creditors? Share your views in the comments section below.
Picture Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for reference only. It is not a direct offer or solicitation of an offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. The company or the author shall not bear any direct or indirect responsibility for the use or reliance on any content, goods or services mentioned in this article or any loss or loss related to it.