Canadian Court Takes Control Of $26 Million CAD In A Dispute Related To QuadrigaCX Exchange
A Canadian court has taken control over $26 million CAD that were claimed by the cryptocurrency exchange QuadrigaCX. The crypto trading platform is asking the funds due to a dispute related to the funds’ provenance.
The Canadian Imperial Bank of Commerce (CIBC) has been granted an interpleader order on November 9. The decision was taken by the Ontario Superior Court of Justice, Judge Glenn Hainey. The interpleader order allows the court to take control of the funds until their owners can be established. It is important to mention that the bank will maintain liability for the funds.
The interpleader right takes place when there are two parties claiming the same funds. This is what Christine Duhaime, a financial crime lawyer and managing partner of Duhaime Law said.
In this case, there are around $20 million dollars in assets that the CIBC decided to freeze. It will now be important to understand who is the owner of these funds QuadrigaCX, is payment processor known as Custodian, or Custodian's director Jose Reyes. The parties involved couldn’t agree on it. This is why the court is currently managing these funds.
Duhaime commented on the matter:
“The next step is that CIBC will transfer the disputed funds into the Court’s account and then the parties, including the customers of Quadriga who bought digital currencies with them during the time in question, can make an application for the return of funds that they believe are theirs. That includes Quadriga, who can bring an application to claim the funds.”
At the same time, QuadrigaCX’s customers can apply to have their funds released by the court. However, their identities might be revealed because of this issue and this could potentially expose tax liabilities for those coming forward.
Moreover, Duhaime said that when banks de-risk accounts they also provide clients with information about that 30 days before. In some cases that number may increase to 90-120 days. In this way, clients can find a different banking service.