QuadrigaCX cryptocurrency exchange officially placed in bankruptcy
Less than three months after one of Canada's biggest cryptocurrency exchanges was shut down amid a swirl of controversy, a bid to restructure Vancouver-based QuadrigaCX has failed and the virtual company has officially entered bankruptcy proceedings.
The move, approved today by a Nova Scotia judge, marks a turning point for the 115,000 users who are owed more than $260 million in cash and cryptocurrency, including Bitcoin and Ethereum.
The transition to the bankruptcy process means Ernst and Young, the court-ordered monitor overseeing the case, will be granted enhanced investigative powers as a trustee under the federal Bankruptcy and Insolvency Act.
The insolvent company was granted protection from its creditors under the Companies' Creditors Arrangement Act on Feb. 5, but it quickly became clear that the company had no real assets and no employees, and that the process of recovering the missing funds would be difficult.
The exchange was shut down Jan. 28, more than a month after its lone director, 30-year-old Gerald Cotten of Fall River, N.S., died suddenly while travelling in Jaipur, India.
Soon after his death was announced, court documents revealed he was the only QuadrigaCX employee who knew the encrypted pass codes needed to access $190 million in cryptocurrency locked in offline digital wallets.