Canadian exchange trustee QuadrigaCX has received $171 million in claims from clients.
Ernst & Young (EY), the trustee of the controversial QuadrigaCX bankruptcy crypto-currency exchange, revealed that it has only about $29.8 million to distribute, despite receiving $171 million in claims.
In a November 6 update submitted to the Ontario Superior Court of Justice, EY stated that it had received 17,053 claims from clients who had entrusted their funds to the Canadian exchange.
Claims include nearly $90.2 million in CAD, and over $6 million in cryptocurrency including 24,427 Bitcoin (BTC), 65,457 Ethereum (ETH), 87,031 Litecoin (LTC), 7,723 Bitcoin Cash (BCH), 17,934 Bitcoin Gold (BTG) and 7,098 Bitcoin SV (BSV).
EY points out that QuadrigaCX founder Gerald Cotten, whose death drew media attention as he was the only person in possession of the keys associated with the exchange’s wallets, used the funds of his 76,000 clients to trade, probably contributing to the discrepancy between assets and liabilities:
„Mr. Cotten traded with the balances in the accounts of Involved Users who had deposited real assets, so Quadriga’s assets probably never matched the liabilities due to the Involved Users.“
Cotten died in December 2018, after the growing solvency problems faced by the exchange in previous months. Further investigation revealed that most of the exchange’s funds appear to be in the hands of the blockchain industry’s well-known shadow bank, Crypto Capital.
So far, EY has acquired $29.8 million through the sale of Cotten assets, an agreement with Cotten’s widow and the recovery of funds from a third-party payment company used by the exchange.
The trustee intends to convert all recovered assets into Canadian dollars, and allocate funds to users based on cryptocurrency prices recorded on 15 April 2019, when QuadrigaCX declared bankruptcy, or on 5 February 2019, when access to the exchange was blocked.
EY has asked the court to determine the date to be used in the conversion rate.