Maintenance Issues Force QuadrigaCX to Temporarily Shut Down, Could Legal Troubles to Blame
QuadrigaCX, a cryptocurrency exchange, has been in hot water for months with their own customers, considering that no one has been able to withdraw their crypto assets for months now. There has been plenty of rumors surrounding the cause, but the company did not exactly put themselves in a good position today when they notified users that they are offline as a result of a system upgrade. However, many customers do not believe this narrative.
The bad news looks like it has been following the Canada-based QuadrigaCX for over a year. They have been dealing with a legal case that took over their attention for the better part of 2018, which was against the Canadian Imperial Bank of Commerce (CIBC). The CIBC frozen accounts by the payment processor used by QuadrigaCX, saying that they could not determine the source of the deposited funds. At the time, QuadrigaCX maintained that it owns the funds, but the CIBC had still deliberated the validity of their claims.
Along with this battle, which was pending a verdict in October, the CEO and founder died last month, according to a press release from the company. The statement came from Jennifer Robertson, the wife of CEO Gerald Cotton, who said that he passed away in India on December 9th as a result of complications from his Crohn’s disease. Days later, QuadrigaCX sent out an email to all customers, saying that the processing of withdrawals will be done “slowly,” but that the team was
“actively working on having the funds deposited and distributed.”
There was no other update at the time.
Now, on top of all of these issues with the account, the company is stating that the platform went down on Monday as a result of a system upgrade, offering no information about how long consumers can expect the services to be unavailable. The “Status Update” on the website explains nothing else, saying that the company
“will keep [customers] updated as we know more.”
Even though the CIBC legal issues have already been resolved, social media posts on Reddit indicate that the customers aren’t able to easily withdraw as they had expected. In the meantime, interim CEO Aaron Matthews commented on January 15th that the customers waiting for funds would have them “within two weeks.” That time ends tomorrow.
Jose Reyes, owner and managing director of the payment processor that endorsed the bank drafts involved in the legal case named Billerfy, said that he did not actually have a timeline on returning funds. Speaking to CoinDesk, he confessed that they were not able to commit to the timeline established by Matthews, saying,
“[N]o banks have the appetite to take the drafts, so we are looking around for crypto-friendly banks.”
A shareholders meeting was planned for the end of the last week on Friday, while will allow them to elect new officers. The meeting is a response to Robertson’s petition as the executor of the late CEO’s estate. In the petition, Robertson states that there was no officer left in the company at all after the death of Cotten. At this point, the results of the meeting, if there was one, have not been released.