In a recent announcement by the court-appointed trustee overseeing the bankruptcy of QuadrigaCX, creditors are set to receive an “interim dividend” of approximately 13% of their total claims. The announcement comes as a relief to the thousands of customers of the defunct Canadian cryptocurrency exchange, who have been left in limbo since the exchange’s collapse in early 2019.
QuadrigaCX was once the largest cryptocurrency exchange in Canada, with over 115,000 customers and $190 million in assets. However, after the sudden death of its founder and CEO, Gerald Cotten, in December 2018, the exchange was plunged into chaos. It was soon revealed that Cotten had been the only person with access to the exchange’s private keys, which are required to access a user’s cryptocurrency holdings. As a result, many QuadrigaCX customers were unable to access their funds, leading to widespread outrage and legal action.
In response to the crisis, QuadrigaCX filed for bankruptcy in April 2019, and a court-appointed trustee was put in charge of managing the exchange’s assets and determining how best to distribute them among its creditors. Since then, the trustee has been working to identify and verify the claims of QuadrigaCX’s customers, in order to determine how much each creditor is owed.
The trustee’s latest announcement indicates that the claims process is much further along than previously thought, and that creditors can expect to receive some of their funds sooner rather than later. The “interim dividend” of 13% will be paid out to all creditors whose claims have been approved by the trustee, and will be funded by the sale of QuadrigaCX’s remaining assets.
This is certainly good news for QuadrigaCX’s customers, many of whom have been waiting for over two years to access their funds. However, it is important to note that the interim dividend is only a fraction of what many of these customers are owed. In total, QuadrigaCX’s creditors have filed claims worth more than $200 million, meaning that the interim dividend will only amount to around $30 million.
Furthermore, it is not yet clear how much longer the claims process will take, or what percentage of their overall claims creditors can expect to receive. The trustee has indicated that it is still working to recover funds from various sources, including the exchange’s former payment processors and banks. It is possible that further recoveries could increase the amount of funds available for distribution to creditors.
For now, however, the interim dividend represents a glimmer of hope for QuadrigaCX’s creditors, many of whom have been left in financial limbo for far too long. It is also a reminder of the importance of properly securing cryptocurrency assets, and of the risks associated with trusting a centralized exchange with one’s funds.
Moving forward, it is likely that we will see increased scrutiny of cryptocurrency exchanges and greater emphasis on individual control over private keys. As the crypto industry matures, it will be essential to develop better ways of protecting users’ funds and ensuring that they are not left in the lurch in the event of an exchange failure. The QuadrigaCX debacle has been a painful lesson for many, but it could also be a catalyst for positive change in the industry.
Creditors of QuadrigaCX, a bankrupt Canadian cryptocurrency exchange, will be receiving an interim dividend of 13% of their total claims, according to a notice from the bankruptcy trustee Ernst & Young. The notice also stated that 305.6 million CDN ($223 million) worth of claims have been made by 17,648 creditors. Of those creditors, 15,356 are owed between $0 and $10,000, while 1,784 are owed between $10,000 and $49,999. Only 15 creditors are owed more than $1 million, with the Canada Revenue Agency owed 11.7 million CDN worth of back taxes from 2016 to 2018.
Former users of the exchange, who mostly held cryptocurrency assets at the time of the firm’s collapse in 2019, will be receiving the monetary value of their assets as of April 15 of that year. For example, if someone held 1 Bitcoin (BTC) at the time, they will eventually receive 6,739 CDN ($4,933), with 13% of that soon coming as an interim dividend. It is not clear when these interim dividends will be distributed, but the law firm representing the creditors suggested that it will happen in the next few weeks.
QuadrigaCX was one of the largest cryptocurrency exchanges in Canada before it became insolvent in early 2019. Shortly after its co-founder and CEO, Gerald Cotten, died in India, taking the private keys to QuadrigaCX’s offline storage systems to his grave. This left the exchange unable to access its funds, and resulted in its insolvency.
The situation highlighted the importance of proper security measures and the need for contingency plans in the event of key personnel becoming incapacitated. It also served as a warning to cryptocurrency investors to exercise caution when choosing which exchanges to trust with their assets.
While the interim dividend is a welcome development for QuadrigaCX’s creditors, they will still only be receiving a small percentage of what they are owed. The remaining funds will be held in reserve for future disbursements related to the administration of the bankruptcy. A final distribution will be made at a later date.
In conclusion, the interim dividend for QuadrigaCX’s creditors is a step in the right direction, but it is still a small consolation for those who lost significant amounts of money on the exchange. It is important for the cryptocurrency industry to learn from the mistakes made by QuadrigaCX and to take measures to prevent similar situations from occurring in the future.
