Ernst & Young (EY), the trustees of the now-bankrupt QuadrigaCX crypto exchange, announced nearly 17,000 applicants have filed for the remaining assets of the exchange.
According to the published note on May 6th, EY claimed it will pay out the funds, totaling to around $300 million in current valuation, in Canadian dollars. However, the process to pay out the customers is expected to take years due to court and technical proceedings.
Nearly 17,000 claims on QuadrigaCX’s assets
The audit firm took over custody of the exchange’s assets following the reported death of the founder of QuadrigaCX, Gerald Cotten, who held the private keys to the crypto holdings, in early 2019. The published report states a total of 16,959 applicants claim assets ranging from Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Bitcoin Gold (BTG), Bitcoin SV (BSV) and also fiat in Canadian and U.S dollars.
The trustee holds about $300 million in assets recovered from the failed exchange at the time of writing. However, the company is yet to release a working plan on how they will distribute the assets once clearance is given. The post, however, warns that the distribution could take years, as seen with the Mt. Gox case – now in its sixth year.
On the technical side of things, the exchange is yet to verify all documents received from the applicants. Moreover, some do contain technical deficiencies such as a missed signature or some minor details missing and the difference in amounts stated by the claims and the exchange’s database.
At the time of closure, the exchange had over 115,000 accounts on the platform.
The Canadian Revenue Authority (CRA) dues
The wait for refunds will take a few more years as the Canadian tax authorities, CRA, also come into the fray according to Miller Thomson, the court-appointed law firm representing Quadriga's users. According to Thompson, the regulatory authority will have to check for any unfiled taxes on the funds before they are disbursed – and they are yet to audit them. Miller’s note to customers,
“As Quadriga failed to file tax returns in the ordinary course of business, the determination of a Canada Revenue Agency tax claim against Quadriga is necessary prior to the Trustee declaring any distribution to Affected Users or creditors.”
Canadian attorney in bankruptcy, Evan Thomas, believes the fastest way to recover the funds to users would mean no difference in QuadrigaCX ‘accounts’ and the claims and The CRA laying off claims of the taxes. He said,
“The best-case scenario is that the CRA doesn't file a claim, there aren't a lot of disputed claims and that the trustee can proceed to a distribution of what it has on hand relatively soon.”
The case of QuadrigaCX, which left close to $150 million in user assets lost in the wind raised the skepticism in the industry. A recent poll during a Virtual Consensus 2020 event on QuadrigaCX shows that close to 60% of the people believe that Gerald Cotton may still be alive and some have called on the Royal Canadian Mounted Police to exhume the body for proof.