The looming danger of bankruptcy over Canada’s major cryptocurrency exchange QuadrigaCX, has been realized as the exchange is officially declared bankrupt, as reported local media outlet CBC on April 8.
Approved by Nova Scotia Supreme Court Justice Michael Wood, the Quadriga’s bankruptcy follows the monitor Ernst & Young’s (EY) recommendation that it should be declared bankrupt earlier this month.
The legal team of EY argued in the report that the ongoing restructuring process for QuadrigaCX under the Companies’ Creditors Arrangement Act (CCAA) should be shifted to an alternative process under the Bankruptcy and Insolvency Act (BIA). As per the ruling, EY now had enhanced investigative powers as a trustee under the BIA.
This means that the company can require the production of documents and testimony from witnesses. Wood also granted a so-called asset preservation order from EY, which includes even the assets held Quadriga’s late co-founder Gerald Cotten’s wife, Jennifer Robertson, and the Cotten estate. Under the order, Robertson is prohibited from selling, removing and transferring any assets.
Following a sudden demise of Cotten, Quadriga filed for creditor protection, citing that the firm has lost access to its cold wallets and corresponding keys, that supposedly held the assets owed to various clients. Currently, the exchange reportedly owes more than $195 million to over 115,000 customers.
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