As QuadrigaCX’s Court Case Continues, Judge Appoints Two Law Firms for Customer Representation
The QuadrigaCX case has been a messy one already, but there is still so much left to handle. Following the death of their founder in December, the platform has been in trouble. It seems that the only one with the private keys to the company’s cold wallets was Gerald Cotten, the founder, which was truly only the first complication in this situation.
The cold wallets allegedly store $136 million in cryptocurrencies, which has been stored offline in a probable attempt to protect the funds. As the company realized that its own efforts would be fruitless in providing retribution to the hundreds of thousands of investors, it filed for creditor protection, which it was granted. For 30 days from the date the protection was approved, the exchange has the ability to seek out the missing cryptocurrencies, along with the $53 million held in fiat through various payment processors. Ultimately, this whole tragedy could end up resulting in the sale of the trading platform.
At this point, recovering the frozen cryptocurrency has been unsuccessful. In fact, the platform “inadvertently” sent 100 bitcoins to the very cold wallets that it has no access to, effectively losing the Bitcoins until a solution for the wallets can be found. There is no explanation of how this even happened, but creditors are restless. Luckily, the judge overseeing this case in Nova Scotia, Supreme Court Judge Michael Wood, has officially established the representatives of the suffering customers.
According to records from today, the firms representing the investors, in this case, will be Miller Thomson and Cox & Palmer, which are both based in Canada. They will be representing the 115,000+ customers when the 30 days end and additional sessions in court commence. Other law firms that attempted to secure their place in the case include Bennett Jones/McInnes Cooper and Osler, Hoskin and Harcourt/Patterson Law.
The decision to use Miller Thomas and Cox & Palmer is based on their “extensive insolvency and [Companies’ Creditors Arrangement Act] experience.” The judge also added that Miller Thomson has previous legal experience in crypto-related proceedings.
Now, Miller Thomson must seek out information from each of the creditors involved, which needs to include their contact information and the amount they claim to have lost. The class action lawsuit will not immediately be filed, considering the protection granted to QuadrigaCX at the beginning of the month. However, this new assignment of representation gives the law firm a chance to prepare potential future lawsuits. Considering the outrage that has been expressed by this community, legal action is highly likely.
The stay of proceedings only lasts until March 7th, though there is a hearing on March 5th that will allow the representatives of QuadrigaCX to demonstrate any progress that has been made on recovering funds. At this point, the collective amount that the court has decided is due to the exchange’s users amounts to $196 million, based on the recent court filings.
Still, there is a chance that Quadriga and their court-appointed monitor (Ernst & Young) will file for an extension. It will be up to Judge Wood if this extension would be approved.