17,000 QuadrigaCX users have filed claims, but it could take years

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The number of people who have filed claims for refunds from the now-defunct QuadrigaCX digital currency exchange is close to 17,000. This is according to Ernst & Young (EY), the court-appointed trustee in the exchange’s bankruptcy case. However, according to legal experts, it could be years before any of them get a penny, especially if the Canadian taxman pursues defaulted tax payments.

In a notice to creditors published May 12, EY revealed that as of May 6, it had received and was processing 16,959 claims filed against the exchange. The former users of the exchange are claiming assets in Bitcoin SV, Ethereum, Litecoin, Bitcoin Gold, BCH and BTC. They also claim fiat currencies in Canadian dollars and U.S dollars.

The value of these assets as at May 12 stands at just over $306 million. However, on February 5, the filing date, the assets value stood at $166 million. EY is yet to determine the rates of currency conversion it will apply in the repayment process. It did, however, reveal that the claims would be settled in Canadian dollars.

EY claimed that it’s still processing the claims and verifying the supporting documents. Some of them contain technical errors, such as unsigned claims. The audit firm continues to receive the claims, even though it had set the deadline at August 31 last year.

And while the creditors remain hopeful that they will get refunded, one bankruptcy expert claims that it could take up to five more years before this happens. Speaking during the ongoing Consensus: Distributed conference, Canadian bankruptcy attorney Evan Thomas pointed to Mt. Gox as proof that these kinds of cases push on for years.

Mt. Gox went bankrupt in 2014, but today, six years later, the case is still in court.

Thomas pointed out that one of the factors that could hold up the claims is the involvement of the Canadian Revenue Agency. The agency is currently auditing the exchange for unpaid taxes. In an update on May 12, Miller Thompson, the law firm representing the aggrieved users pointed this out as well.

There are other factors that could hold up the refunds, including disputes by some of the users on amount owed. “That’s exactly what’s happened in Mt. Gox,” Thomas stated.

Even if none of these factors hold up the refunds, a majority of the lost funds are yet to be recovered. EY has only managed to recover $30 million out of the alleged $300 million that was lost.