QuadrigaCX Trustee, EY, Reports Only 17% ($30M) Of The Lost Users’ Funds ($171M) Can Be Reimbursed


  • – QuadrigaCX trustee Ernst & Young (EY) announces it has less than $30 million to reimburse users who are claiming their funds.
  • – The claimants demand over $170 million in fiat currency, and crypto assets were lost when the CEO of the exchange, Gerald Cotten, died with the exchange’s private keys.

According to a filing by EY on Thursday updating the Ontario Superior Court of Justice, over $171 million in claims were made by QuadrigaCX users to claim back their funds. Following the death of Gerald Cotten in December 2018, users of QuadrigaCX were left hanging dry as it is alleged that he died with the private keys holding crypto assets.

The motion record filed states that the trustee collected 17,053 claims on the ongoing bankruptcy case. These claims totaled to $171million including 24,427 BTC, 65,457 ETH, 87,031 Litecoin (LTC), 7,723 Bitcoin Cash (BCH), 17,934 Bitcoin Gold (BTG), and 7,098 Bitcoin SV (BSV). A further C$90.2 million (~$9 million) in fiat is also locked in the exchange, the statement continues.

However, after selling off Cotten’s assets, settling with the widow, and retrieving all payments from third-party firms that dealt with Quadriga, only a partial amount of $29.8 million was recovered.

Following the death of the CEO, over 79,000 customers on the exchange were affected. According to EY’s motion record to the court, Cotten used the customers’ funds to run a kind of Ponzi scheme – with himself at the top. This could be the likely cause of the current large discrepancy between the exchange’s assets and liabilities.

He used the ‘lost cryptocurrencies’ to trade on behalf of the affected users, and, likely, the funds are not sitting in the wallets claimed. EY statement reads, ‘

“Mr. Cotten proceeded to trade these account balances with Affected Users that had deposited real assets; as such, Quadriga’s assets likely never matched the liabilities owed to Affected Users.”

The statement also asks for the court's intervention in distributing the collected amounts back to the affected users. The trustee will convert the recovered assets into Canadian dollars, but the rate they are converted is the problem.

Should EY use the April 15, 2019 conversion rate when the exchange officially filed for bankruptcy or on February 5, 2019, when users were denied access to their accounts?

The trustee has since asked the court to decide which conversion rates they should use before distributing the estate assets.

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