Canada’s one of the most controversial cryptocurrency exchange QuadrigaCX officially declared bankrupt by Nova Scotia judge in Halifax on Monday, April 8, 2019.
Unfortunately, the time taken by QuadrigaCX to restructure the things has failed and amid the legal monitory authority, the Big Four audit firm Ernst & Young (EY) recommended the Supreme Court of Nova Scotia in its “Fourth Report of the Monitor” to place the scandalous cryptocurrency exchange Quadriga Fintech Solutions Corp in bankruptcy on April 1, 2019.
The document said:
“Given the present circumstances, the possibility that QuadrigaCX will restructure and emerge from Companies Creditors Arrangement Act (CCAA) protection appears remote. The ongoing investigation to locate and recover assets for distribution to creditors with the intent of optimizing recoveries for the Applicant’s stakeholders can be efficiently administered in a proceeding under the Bankruptcy and Insolvency Act (BIA).”
Here the legal auditors are proposing to shift the CCAA proceedings into BIA route because amidst of the granted protection of QuadrigaCX from the creditors under the Companie’s Creditors Arrangement Act on Feb. 5, 2019, the realistic depiction of the failed restructuring process has come into the notice and became clear that the company has neither the employees nor the real assets. Also, the procedure of retrieving the missing funds would be complex and probably impossible.
The Court Justice Michael Wood approved the latest move which resulted in a decisive moment for 115,000 creditors who owed over CA$260 million in cash and crypto assets, including Bitcoin and Ethereum to QuadrigaCX crypto exchange.
As previously reported by KoinPost, Vancouver-based Canada’s one of the biggest cryptocurrency exchanges lost all its door to the cold wallet due to the loss of wallet keys or encrypted passcodes which were only accessible by founder, Gerald Cotton, being the sole authoritative person, who allegedly died in December 2018, in the course of his travel to Jaipur, India.
Further, Supreme Court of Nova Scotia Justice Michael Wood also decided to permit EY to proceed with an asset preservation order including all the assets and Cotton estate held by late Gerald Cotton’s wife Jennifer Robertson. The court also commanded Jennifer not to transfer, remove, and sell the property or any assets. The legal auditing firm EY, now under the federal Bankruptcy and Insolvency Act, also allowed to start enhanced investigative power as a trustee.