Ernst & Young, the trustee of controversial failed cryptocurrency exchange QuadrigaCX, revealed it only has roughly $29.8 million in funds to distribute to claimants, despite receiving $171 million worth of claims.
In a Nov. 6 update filed with the Ontario Superior Court of Justice, EY revealed it has received 17,053 claims from customers who had entrusted their funds with the Canadian exchange.
The claims include nearly $90.2 million in Canadian dollars and more than $6 million worth of cryptocurrency, including 24,427 Bitcoin (BTC), 65,457 Ether (ETH), 87,031 Litecoin (LTC), 7,723 Bitcoin Cash (BCH), 17,934 Bitcoin Gold (BTG) and 7,098 Bitcoin SV (BSV).
EY notes that QuadrigaCX’s founder, Gerald Cotten — who drew worldwide media attention for reportedly dying with the only keys to the exchange’s wallets — traded using his 76,000 customers’ funds, likely contributing to the discrepancy between assets and liabilities:
“Mr. Cotten proceeded to trade these account balances with Affected Users that had deposited real assets, as such, Quadriga’s assets likely never matched the liabilities owed to Affected Users.”
Cotten died in December 2018, with the exchange facing escalating solvency issues in the months prior. Later investigations revealed that much of the exchange’s funds appear to have been in the hands of the notorious shadow-bank to the crypto sector, Crypto Capital.
EY has so far found $29.8 million through selling assets from Cotten’s estate, settling with Cotten’s widow, and retrieving funds from a third-party payments firm used by the exchange.
The trustee plans to convert all recovered assets into Canadian dollars and allocate funds to users based on cryptocurrency prices from either April 15, 2019 — when QuadrigaCX declared bankruptcy, or Feb. 5, 2019 — when users were blocked from accessing the exchange.
EY has requested the court to determine the date to use for the conversion rate.