QuadrigaCX faces more auditing, this time from Canada’s taxman
The QuadrigaCX cryptocurrency exchange collapse continues to see fallout, with no clear indications that users will ever recuperate the money they lost. In the latest chapter of the sage, a new audit is being performed on QuadrigaCX’s corporate tax filings and each new chapter takes yet another chunk out of any potential settlement that may have been available, at some point, to users of the platform.
The Globe and Mail reports the Canada Revenue Agency (CRA), the country’s equivalent to the IRS, is putting QuadrigaCX’s tax returns under a microscope. It is digging up everything it can starting from October 1, 2015 and ending September 30, 2018, about the same time that the exchange’s operations began to unravel.
The CRA has contacted audit firm Ernst & Young (EY), who is serving as the trustee for QuadrigaCX and coordinating any eventual payout, requesting that it turn over any documents and information it may have. EY said in a statement, “The Trustee intends to discuss the request for information with CRA Audit and their counsel and will return to Court for further direction, if necessary.”
The global audit firm cautions, however, that time spent responding to the CRA’s request is going to eat into any possible restitution that could be made to creditors – all 115,000 of them. EY has been given the court’s authority to charge for its services related to the saga, and the money is being deducted from any potential funds the firm locates that were under QuadrigaCX’s control.
EY recognizes that it has no alternative but to respond to the request, but acknowledges that the process is going to take some time. It adds, “Accordingly, the Trustee is focused on conducting its document collection, organization, review and production efforts in as cost effective a manner as possible […] it is not expected that the Trustee will be in a position to respond to the CRA Audit request at this time.”
What started as a sob story of an exchange’s financial independence being handcuffed by banks quickly took a turn for the worse last year when the truth started boiling to the surface. As it turned out, banks couldn’t be blamed for the fiasco and QuadrigaCX’s founder, Gerald Cotten, may have been exclusively at fault for losing millions of dollars. The world may never know the true story, though, as Cotten reportedly died of complications from his fight with Crohn’s disease.
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