Ernst & Young, a monitor to the proceedings of the defunct Canadian Exchange – QuadrigaCX, has revealed liabilities of $160 million and assets of $20.8 million in the newly released a report on May 9, 2019. The report comprises the assets and liabilities of QuadrigaCX and its subsidiaries. The assets and debt are distributed between three subsidiaries of QuadrigaCX including Whiteside Capital Corporation, Quadriga Fintech Solutions, and 0984750 B.C. Ltd.
Following the recommendation of Ernst & Young and on approval by Michael Wood, a Nova Scotia Supreme Court Justice, QuadrigaCX is officially declared bankrupt in early April 2019. The tag bankruptcy allows the sale of assets that comprise operating platform of QuadrigaCX. It also allows reducing procedural costs and streamlines the administrative burdens.
Files for creditor protection
QuadrigaCX has filed for protection from the creditors following the demise of its co-founder – Gerald Cotton. The exchange lost access to the keys and cold wallets following the death of Gerald. All clients’ assets are held in the cold wallets.
The exchange has declared filing for creditor protection after a week on its website. The application is as per the Companies Creditors Arrangement Act and allows addressing the financial issues if approved. The Companies Creditors Arrangement Act gives a chance for the financially troubled companies to restructure the business. The Canadian law allows companies to apply to prevent bankruptcy. It also makes way for the creditors to receive some payment from the troubled companies.
It has tried many ways in past weeks to find the cryptocurrency assets stored in the cold wallets and address the liquidity issues. The exchange put in efforts to get information from the cold wallets and satisfy the cryptocurrency balances of customers. Its efforts have been futile. The exchange witnessed complaints from customers about withdrawal problems related with cryptocurrencies and fiat on social media.
The exchange has requested the services of Ernst& Young to oversee the proceedings in its application to the Nova Scotia Supreme Court for creditor protection.
According to Ernst & Young, the exchange stored bitcoin (BTC) in six crypto wallets. The wallets have no deposits since April 2018 apart from an inadvertent bitcoin transaction that amounts to $500,000.
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