Canadian-based QuardigaCX says they can’t find their cold storage wallets. In a notice published on its website, the crypto exchange says they have filed an application for protection under the Companies’ Creditors Arrangement Act (CCAA), a Canadian law which deals with bankruptcies in Canada.
For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.
The exchange wins out by not qualifying as a bank or a trust, both of which are exempt from CCAA protections.
CEO’s Death Sends Quadriga Into A Tailspin(?)
On January 14, the exchange announced the death of their founder and CEO, Gerald Cotten.
QuadrigaCX began having problems last October when a bank froze its funds. As CCN.com’s David Hundeyin wrote at the time:
A court document quotes the trading platform urging the court not to yield to what it described as unverified and invidious conjecture that the transactions are questionable. Margaret Waddell, Quadriga’s lawyer claims the judge has reserved his decision in the hearing on the case. The CIBC on its part has refused to make any comments on the case.
The exchange was the largest in Canada by volume until its sudden demise this month. The company’s public notices leave many details out. They are not the first Canadian exchange to suddenly face problems. MapleChange is another notable example.
CCN.com urges readers who have experience with QuadrigaCX to reach out with your stories. We’d like to know more about how well the exchange was functioning leading up to its apparent end. An exchange managing to lose its cold storage wallets is, at a minimum, an indication of an organization in disarray. We can speculate that the passing of the CEO played a big role in the exchange’s troubles, but we can’t know before we’ve received comment back from them.
As such, this is a developing story. Updates are likely to follow.
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Last modified: September 29, 2020 1:26 PM