- QuadrigaCX trustee is looking to distribute about $30 million recovered so far from the exchange and Its founder.
- Today, EY filed with a court on how it intends to distribute the funds.
For years now, Ernst & Young (EY), the appointed trustee of QuadrigaCX ongoing bankruptcy case, has been struggling to help the exchange users’ to recoup their losses following the sad death of the founder, Gerald Cotten. Today, EY filed a proposal on how it intends to compensate the affected users. Meanwhile, the trustee has only managed to recover nearly $30 million from both the exchange and the founder’s assets.
QuadrigaCX closure
QuadrigaCX is a cryptocurrency exchange based in Canada. It was established by Cotten, who was announced dead in 2018. The founder’s passing eventually resulted in the management’s decision to file for bankruptcy in April last year. EY was appointed as a trustee to handle the bankruptcy case, which hasn’t been easy as there were discrepancies between the Canadian exchange’s liabilities and assets. A total of 76,000 customers were affected as the exchange closed operations.
As reported, the founder was allegedly using customers’ money to fund another scheme, which may have resulted in the discrepancy. The trustee further alleged that the founder used customers’ funds to maintain a luxury lifestyle, thereby leading to the current debt after his death. Per the claims, the exchange owes CA$90 million and about US$6 million. For cryptocurrency, the customers claimed a total of 24,427 Bitcoin (BTC), 65,457 Ether (ETH), 87,031 Litecoin (LTC), 7,723 Bitcoin Cash (BCH), 7,098 Bitcoin SV (BSV), and 17,934 Bitcoin Gold.
EY allocation strategy
QuadrigaCX trustee has raised about $$29.8 million so far, out of the $171 million claims of customers. This particular fund was recovered after most of Cotten’s assets were cashed out. The trustee was able to retrieve the funds left in the third-party payments company used by QuadrigaCX during operations. As EY filed today, the recovered funds and assets will be converted and allocated to the affected users in Canadian dollars.
In the filing, the trustee wants the court to decide the price of cryptocurrency at certain dates, with which the recovered funds will be distributed. EY mentioned if they were to use the crypto price in April last year, which was when the exchange filed for bankruptcy. Or whether they are to use the price during the time when the customers couldn’t access their cryptocurrencies again, precisely on February 5, 2019.
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