Approval on Two Fronts
In the latest Quadriga development, we have seen a Nova Scotian judge approve the embattled exchanges transition into bankruptcy.
Until now, the Quadriga’s state of affair has been, essentially, in limbo, as their situation was evaluated by court appointed Ernst & Young. Throughout this process, multiple ‘stay of action’ orders have been granted, as various restructuring scenarios have been considered in order to sort through the mess.
In addition to approving the transition into bankruptcy, the courts have also approved an ‘asset preservation order’. During the initial stages of investigation into the situation, undertaken by Ernst & Young, it was found that Quadriga CEO, Gerald Cotten, mixed the use of both personal and business funds. With this being the case, any assets that may have been products of these practices are essentially placed on lock-down. This will prevent beneficiaries of Cotten’s estate from selling off assets which potentially represent the lost funds of many Canadians.
Within Canada, the term Bankruptcy is often used interchangeably with ‘insolvency’. Either term refers to a court ordered state, for individuals and companies that no longer have the means to pay off their debts.
By entering into bankruptcy, an individual or company relinquishes a great deal of control over their finances. In doing a so, a third party is appointed to the case, which will evaluate the state of affairs, and determine the best course of action to most effectively pay off existing debts.
With Ernst & Young presiding over the bankruptcy proceedings, they will now have a greater amount of authority moving forward. Until now, Ernst & Young has been working alongside Quadriga and affiliated companies in good faith – they are now the authority, and can mandate the release of information, documentation, etc.
QuadrigaCX was a Canadian based cryptocurrency exchange. The company was founded and run by CEO, Gerald Cotten, in 2013.
The popular exchange met with a spectacular and unfortunate demise in late 2018, when Cotten unexpectedly died. Upon passing, it came to light that the exchange lost access to nearly $200 million worth of funds – belonging to over 115,000 Canadians.
In the aftermath, the company has closed its doors, and the Courts have appointed Ernst & Young to make sense of the situation.
Ernst & Young
Ernst & Young is a global accounting firm, which is based out of London, England. The company offers services pertaining to not only tax, but transaction and advisory roles.
In Other News
As the QuadrigaCX case develops, we have continued to highlight the case along the way. To learn more about the situation, and how QuadrigaCX has found themselves where they are now, make sure to read the article below!