Business

Derek Tonin

QuadrigaCX goes to court to fight off bankruptcy

The embattled Canada-based cryptocurrency exchange, QuadrigaCX, is looking for relief. In a statement posted on their website, they have announced they are looking for creditor protection from the Nova Scotia Supreme Court.

The statement covers the details of their court filing, along with this short message to their customers:

“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.”

Creditor protection, as defined by the Companies’ Creditors Arrangement Act, is generally pursued under Canadian law to restructure and avoid bankruptcy, as well as ensure that they can at least partially payout some of their creditors.

Troubles started for QuadrigaCX in October, when the company reported that its banking partner had seized nearly $21.6 million in assets over a dispute. The exchange’s founder also passed away, raising questions of if he brought crypto keys with him to the grave, putting the company into even more dire straits.

Since those events, users have complained that they are unable to withdraw funds. Last month, QuadrigaCX responded to those complains, saying they were doing everything they could to resolve the issue and hoped to have everything right in the next two weeks.

Instead, the QuadrigraCX website suddenly went offline on January 28, with a message that the site was down for maintenance. Now that the two-week period is up, rather than paying everyone out, QuadrigaCX has posted about their date in court.

This is all a very frustrating experience for Canadian crypto traders who had faith in the exchange. They will be hoping for better news after the February 5 preliminary hearing.

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