Judge for QuadrigaCX Case Approves $1.6 Million in Fees to Be Paid in Retribution to Affected Firms

Judge for QuadrigaCX Case Approves $1.6 Million in Fees to Be Paid in Retribution to Affected Firms
  • 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.

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Author: Krystle M

SWIFT and the International Real-Time Payments Race: The Cross Border Service Battle Wages On

SWIFT and the International Real-Time Payments Race: The Cross Border Service Battle Wages On

Leading payments platform Swift on July 16 announced its plan to dominate the international payment sector, the plan was revealed in a press release , which was readily available on the firm’s website.

The ‘Payment’ Struggle

The new drive and enthusiasm by swift is a direct reaction to the “One Currency To Rule Them All” initiative by Facebook, which according to a Forbes report is causing an uproar among both the traditional financial sector and the cryptocurrency industry, without sparing governments and regulatory agencies.

The introduction of the Libra project by Facebook has taken virtually every major player in the sector back to the drawing board, and Swift is not exempted. According to the Press release:

‘’ Swift’s aim is simple: to make cross-border payments real-time 24/7 and as seamless, convenient, cost-efficient and accessible as domestic payments.

With the projected potential of Libra, and the publicity power it possesses through social media applications like Facebook, WhatsApp and Instagram, financial institutions and international payment platforms all over the world, may find it hard to keep up, and as such, must find a way to step up their game before Libra gain more prominence.

A Swift Cryptocurrency in View?

Some analysts are thus of the opinion that Swift might also launch its own cryptocurrency, to tackle the Libra coin, but others are of the opinion that a Swift coin will do nothing but add to what the company sees as the real problem of international payments, namely the proliferation of self-contained currency systems such as Bitcoin, JPM Coin and others.

Swift is thus antagonizing those who favour multiple competing tokens for international payments, the payment platform points out that each token ultimately serves its own community, but that there is still a need for an interoperability protocol that enables people to transfer value across different currencies and tokens, and that loophole is what Swift plans to exploit.

The payment platform also has a word or two for the banking industry. Swift advised the banks that if it is still interested in keeping its customer base, it can’t continue to do the same thing and expect it will survive.

It is also of the opinion that most customers are tired of the old way, and that if the banks do not step up and move with the tide, it will not only lose customers but die because it won’t be able to keep up.

The Swift platform is not one that is scared of healthy competition from rivals, Bitcoin Exchange Guide reported that Swift announced the launch of the trial of distributed ledger technology integration with R3.

The established payment platform stated that the new development will allow it to monitor payment flows and support APIs using the SWIFT and ISO standards.

The idea at inception was to link the GPI Link and Corda to authorize payments via the two sides. GPI payment will then be settled by banks and the credit confirmations will be sent.

The struggle to determine the leading payment solution will continue to generate a lot of attention, as virtually everybody is up in arms against Libra.

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Author: Ogwu Emma

South Africa’s Payfast Payment Company Stops Accepting Bitcoin (BTC) Due to Fees and Speed

South-Africas-Payfast-Payment-Company-Stops-Accepting-Bitcoin-BTC-Due-to-Fees-and-Speed

In an unfortunate turn of events, PayFast, the first-ever online payment gateway accepting Bitcoin (BTC) in South Africa, called time on BTC payments citing fundamental technical issues in the blockchain and a hitch in user-friendliness.

  • PayFast set to stop Bitcoin (BTC) payment channel on July 20th 2019.
  • High transaction fees and slow confirmation times reasons for the halt.
  • Merchants asked to remove any logos and references to Bitcoin.

“Unfortunately there are a number of limitations and design flaws unique to Bitcoin that make it an impractical substitute for cash, including high transaction fees and long confirmation times for buyers. We’ve tried various ways to mitigate these problems, but unfortunately, these issues are fundamental.” – PayFast Statement

PayFast Halts BTC Payments Channel

An announcement on the official PayFast blog on Friday 12th, 2019 confirms the payment service firm will stop all BTC payments on 20th July 2019, next week Saturday. Bitcoin is struggling to function as a day to day currency usable in a fast and efficient manner as the slow confirmation speeds and high transaction costs hamper adoption.

The broadcast explains that the company had tried various means to make the payment system work but to no avail, citing fundamental issues underlying the blockchain. This brought about an end to the first-ever Bitcoin payment gateway in South Africa.

The company partners with a local Bitcoin exchange, Luno exchange, acting as an intermediary between users and PayFast. Once a user pays the amount at a PayFast accredited merchant in BTC, Ludo facilitates the trade between the user and PayFast. The BTC/ZAR rate is locked down for a period of 10 minutes as confirmations take place to avoid the wild price swings of BTC.

However, in the past few months, the interest in Bitcoin has caused increased confirmation times and high transaction fees across the networks. Bitcoin’s median confirmation time oscillates reaching up to 14 minutes which caused a disruption in users payments to PayFast merchants. The report further states,

“In addition to the frustration that buyers experience when their payments fail, Bitcoin users may also incur a non-refundable fee for every attempted payment. This is the fee the network charges to process a transaction.”

This causes a payment risk on part of the buyers who may lose the transaction fee despite the payment not going through.

Bitcoin a Safe Haven Not a Currency!

Despite the continued calls from Bitcoin maximalists on the use of Bitcoin as a currency, it is becoming clearer that the digital asset is better suited as a safe haven rather than a currency. BTC is currently trading below $11,000 USD mark, signaling a further 5% dip in the past 24 hours, as at time of writing. Despite the fall in price from a high $13,700 USD in the past week, the asset is one of the best performing asset in the world in 2019 growing by 230%.

PayFast is however not abandoning the idea of crypto payments altogether. The report reads that the company is focusing on faster payment methods saying,

“At PayFast, we’re eagerly following the developments of cryptocurrencies and the supporting technologies that are aiming to enable faster payments. As soon as these become workable alternatives, we look forward to supporting cryptocurrencies as a payment method in the future.”

The move by PayFast raised different reactions from the public –some agreed with the move stating the need for a faster and better technology while others condemned the move saying the company “does not understand how Bitcoin works”. An obvious candidate to replace BTC on PayFast was suggested by the public – Bitcoin Cash (BCH).

Can BCH replace BTC on PayFast?

While Bitcoin lags behind in enabling fast payments across the blockchain, Bitcoin Cash (BCH) provides a fast payment system with penny transaction fees for PayFast. BCH is aiming to take over the ruins from BTC as its properties solve the BTC scalability and transaction speed problems. One BCH supporter aims to see BCH on the PayFast payment options. He claims,

“I have made zero payments with BTC in the past 3 years, but dozens with BCH with no issues and paying pennies in fees. If you add BCH you will have my business.”

The de-launch from PayFast comes at a time the Lightning Network, a second layer platform enabling instant BTC payments, launched the Android and iOS apps.

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Author: Lujan Odera

Spend Bitcoin At Amazon, Uber and Starbucks Using Fold’s BTC Lightning Network App

Spend-Bitcoin-At-Amazon-Uber-and-Starbucks-Using-Folds-BTC-Lightning-Network-App

A payment platform called Fold has announced today that it will use the Bitcoin Lightning Protocol in order to enable its clients to buy goods from several stores such as Amazon, Starbucks, Whole Foods, Southwest Airlines and Home Depot. The cryptocurrency can also be used in services such as Uber.

It was also revealed that the company is currently focused on letting the users be more free with their BTC by not needing to pass any Know Your Customer (KYC) procedures. This is partly because all the payments will be done via the LN, not directly on wallets that belong to the company.

Fold is often remembered by some old BTC users. This was one of the first startups to start working in the field. Back in 2014, the main functionality of the app was to allow people to save 20% when using BTC to pay for coffee on Starbucks. Unfortunately, the congestion in the BTC chain caused some problems for the company when people started to massively use it.

The CEO of the company, Will Reeves, affirmed that they soon noticed that they could not use a layer 1 solution, which is why the team decided to change to the Lightning Network, which works as a layer 2 solution.

According to him, the long confirmation times and high fees were the two main problems. It was simply not profitable to use BTC for such small transactions. With the LN becoming considerably famous today and growing a lot recently, it is becoming a popular option and this is why it was chosen to be used in this app.

Other options were tested before, though. For instance, Fold tested the Lightning Pizza service before committing to the LN for all these services. It was, in fact, Lightning Pizza that made the CEO understand how powerful the solution was.

People used it a lot and they were blown away by the results, according to him. While there were some UX and technical issues, the test worked out very well.

With the new update, the company intends to make Bitcoin users and merchants join forces in order to finally make BTC payments mainstream. Merchants will not need to accept the BTC, though, they can receive in whatever currency they want, which eliminates some of the resistance for this.

As the integration with the system will not require a big effort from the merchants nor the installation of any specific hardware, the team believe that it will be easier to see this system be widely accepted.

The whole process from payment to the merchant receiving is set to take only half a minute, which is considerably more efficient than the prior method used by the company.

Discounts Will Be Brought Back In The Future

As we affirmed before, most of the users still remember a time in which they got 20% discounts by using the app. These discounts are not currently being offered at the moment, but the company is planning to get them back.

While they are not back, however, there is a rewards program that is being implemented. The service will reward the users for using Bitcoin, although they will not receive such big discounts.

This startup is currently being incubated by Thesis.co, which is a venture company based in the U. S.

All of Today’s Bitcoin Price Analysis, Chart Forecasts and Industry News

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Author: Gabriel Machado

New Digital Fiat Currency System in Development by the Central Bank of the Bahamas (CBOB)

New Digital Fiat Currency System in Development by the Central Bank of the Bahamas (CBOB)
  • New payment system for digital assets to be introduced by Central Bank of the Bahamas.
  • The initiative, Project Sand Dollar, includes a collaboration between Zynesis and NZIA.io.

The Bahamas is known as a place of luxury to tourists, and a recent announcement from the Nassau Guardian indicates that the Central Bank of the Bahamas is making the environment more friendly. Reported on May 29th, the CBOB will be starting the development of a digital fiat currency system, starting with an official agreement with NZIA.io.

The bank and the transaction provider, respectively, will be responsible for creating and implementing “Project Sand Dollar,” which will be the first time a digital currency has been created in the Bahamas. The collaboration with NZIA.io was first announced in March by the central bank, joining the Zynesis software development firm in the project.

As described by the central bank, Project Sand Dollar will be working on an electronic payment system for “integrated, affordable” remittance, which will be geared towards the local businesses and residents. To be integrated seamlessly into the current financial infrastructure, the team behind the project will ensure that this payment system falls in line with the local financial regulations.

All residents of the island country will now have equal access to digital payments, which reduces the service delivery costs associated with performing transactions with cash.

At this point, there has not been an island selected to pilot the new payment system. However, John Rolle, the bank governor, said that the Family Islands should be ready to completely adopt the initiative by the end of next year. The original plan to bring in a digital currency with government support was announced by CBOB in June last year.

Not all countries are taking such a progressive stance. In fact, the president of Deutsche Bundesbank in Germany warned banks that the volatility of the crypto market could put central banks at risk in the country. The official added that the integration of crypto assets could also create instability of the financial system, specifically in crisis situations.

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Author: Krystle M