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Bankrupt cryptocurrency exchange QuadrigaCX will begin interim distributions to some of its affected users, with Ernst & Young (EY) acting as trustee for some of the users.
Good News For QuadrigaCX Victims
The Canadian crypto exchange has announced its decision to start distributing funds to certain users who were affected by the firm’s bankruptcy two years ago. The exchange first declared bankruptcy in 2019 following the sudden death of its CEO, Gerald Cotten, and the subsequent revelation that he had been the only one with access to the exchange's cold storage wallets. The firm, which was once Canada’s largest crypto exchange, ended up owing customers around $200 million.
The exact amount of funds available for distribution is not yet clear. The court-appointed monitor for QuadrigaCX’s bankruptcy proceedings, Ernst & Young (EY), has stated that it is working to recover as much of the missing funds as possible but has acknowledged that it may not be possible to recover all of them. The distribution will be made from the funds that have already been recovered, which are primarily in the form of fiat currency held in QuadrigaCX's bank accounts.
EY Announces Fund Repayment
The law firm representing QuadrigaCX’s creditors, Miller Thompson, shared the statement from EY clarifying that the interim distributions will be made to those users who have already had their claims approved. The funds will be distributed on a pro-rata basis, meaning that each user will receive a percentage of their claim based on the amount of funds available for distribution.
The statement read,
“If you received a Notice of Disallowance, you have the right to appeal the decision. The first step is to review the reasons for the revision or disallowance and gather any necessary evidence to support their claim. In this case, the Trustee is most likely to have issued a Notice of Disallowance if there was a discrepancy in your proof of claim."
Fraud Or Misfortune?
The announcement of the interim distribution is a significant step forward for QuadrigaCX's affected users, many of whom have been waiting for over two years to receive their funds. Given the complex and unusual circumstances of the exchange's collapse, some users feared that they would never receive any of their funds back.
QuadrigaCX's collapse and subsequent bankruptcy have been the subject of much scrutiny and speculation in the cryptocurrency industry. Many have criticized the exchange's lack of transparency and accountability, and some have suggested that the founder's death was an additional factor to the pre-existing mismanagement or fraud in the management.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.