- A judge overseeing the QuadrigaCX case has approved payment to multiple firms.
- Bankruptcy proceedings for QuadrigaCX are still ongoing.
In the long case of QuadrigaCX, there are many creditors and firms that have been seeking retribution from the now-defunct exchange.
In an effort to reconcile these funds, Nova Scotia Supreme Court Judge Darlene Jamieson approved over $1.6 million in fees to go to these affected firms. Jamieson also stated that the activities and fees taken on by:
- Ernst & Young (EY)
- Stikeman Elliot, the legal counsel for EY
- Kirkland & Ellis, the American legal counsel for EY
- Miller Thomson, the representative counsel
- Cox & Palmer, the representative counsel
According to the judge, there’s been no opposition to the activities and fees. She stated,
“I approve the fees and activities of the monitor during the CCAA proceedings and the fees presented towards legal counsel.”
EY had a nearly impossible task of trying to recover the missing cryptocurrency and fiat holdings of QuadrigaCX, considering that it seemed to be dispersed to multiple third parties. Their work also included attempts to determine if Quadriga had the funds that it said, according to the judge. Jamieson added,
“The monitor’s work has been extensive in administering the CCAA proceeding and seeking to recover funds on behalf of Quadriga and its affected users.”
Ultimately, the judge explained that EY came up against “complicated factors,” like the lack of records on the accounts, and the way that QuadrigaCX stored their information with third parties.
This company marks the first cryptocurrency-based insolvency case in the country and has shown many unique traits that are unique to this type of case, which included “requiring specialized resources for the monitor’s investigation.”
The legal counsel for EY, along with EY itself, charged $1.3 million ($1.7 million CAD). The other representative counsel charged:
- EY: $592,396.57 ($778,444.90 CAD)
- Stikeman: $684,654.63 ($899,677.57 CAD)
- Kirkland & Ellis: $14,367.27 ($18,876.44 CAD)
- Miller Thomson: $302,720.47 ($397,793.00 CAD)
- Cox & Palmer: $37,023.05 ($48,650.53 CAD)
Overall, to each of the companies, the judge approved $1,631,161.99 ($2,143,442.44 CAD) in costs. These payments will be drawn from the recovered funds of the creditor accounts, which contain about $25 million USD ($33 million CAD).
There is still $23.4 million USD ($31 million CAD) to be provided to the creditors in this case, though EY is working to gain another $9 million USD ($12 million CAD) in the sale of some of Gerald Cotten’s estate’s assets. Cotten, as many people remember, was the founder and CEO of QuadrigaCX.
Miller Thomson had been pushing for the claims process to begin for creditors. Former users of the platform have until August 31st to fill out a form, which will include their Quadriga account number, name, address, phone number, and the amount of crypto and fiat held in their account.
For former users that are unsure of what their holdings were before these proceedings can check https://userbalance.quadrigacxtrustee.com/, which was set up by EY. If the user disagrees with the amount shown, they will need to provide their own documentation to support the claim amount they intend to pursue. Miller Thomson’s website has guidance on how to do so.
The court proceedings involving QuadrigaCX have come up against so many roadblocks since January, when the late CEO’s wife filed for creditor protection. Cotten passed away in December and was believed to have taken his passwords to the firm’s exchange wallets with him.
Jennifer Robertson, Cotten’s widow, stated that there were 115,000 users that were owed about $190 million, but she said she was unable to access it, due to Cotten being the only one with information about the accounts’ private keys.
As the investigation continued, controversy and drama unfolded that Cotten may have taken the funds of his customers for personal use, which may have included margin trading. By March, EY stated that they were unable to find or even account for about $100 million in cryptocurrencies, even though Quadriga claimed to have held this amount.
EY quickly moved to put the exchange into bankruptcy, following filings for creditor protection, indicating that the Canadian crypto exchange was unlikely to bounce back. The motion was approved by Nova Scotia Supreme Court Judge Michael Wood, and the CCAA proceeding was paired with the bankruptcy efforts.
With the new ruling from Jamieson, the only proceedings still going on will be that of bankruptcy.
Author: Krystle M