Ernst & Young Plans to Pay Victims Compensation to QuadrigaCX
Ernst & Young (EY) has filed a report with the Ontario Supreme Court. Ernst & Young (EY) acting as the trustee of the QuadrigaCX crypto exchange. In 2019, the largest crypto exchange, QuadrigaCX, halted operations and was declared bankrupt with obligations of 215.7 million Canadian dollars and assets worth 28 million Canadian dollars.
EY said in a report that $ 29.8 million was paid to clients with assets on the QuadrigaCX exchange. Ernst & Young explained that the $ 29.8 million paid came from the sale of Kraton’s real estate, reaching a settlement with Cotton Widow. The report also stated that EY received a total of 17,053 letters of claim from customers who entrusted their crypto and fiat assets to the QuadrigaCX exchange.
The total amount of claims is equal to hundreds of millions. Includes fiat assets worth about 90.2 million Canadian dollars, over $ 6 million and various cryptocurrency assets for the following amounts: 24,427 Bitcoin (BTC), 65,457 Ethereum (ETH), 7723 Bitcoin Cash (BCH), 87031 Litecoin (LTC) ), 7723 Bitcoin Cash (BCH), 7098 Bitcoin SV (BSV) and 17934 Bitcoin Gold (BTG).
The CEO and founder of the crypto exchange Gerald Cotten, died in December 2018 after a trip to India. Some people have doubts about his death. Considering it a falsification in order to hide the fraud. The roughly C $ 250 million relying on the exchange’s customers was missing or unavailable, as Cotten alone owned the cold wallet password data.
Ernst & Young discovered numerous cases of Gerald Cotten’s misappropriation of fiat and digital assets of Quadriga exchange clients.
`` User funds received and held by Quadriga appear to have been used by Quadriga for a number of purposes other than funding and withdrawing funds by users. ‘’
Instead of storing clients’ assets in accordance with regulations, exclusively in Quadrig hot and cold wallets. Cotten transferred large sums to his personal accounts on competitors’ exchanges. According to EY, Cotten either exchanged user funds for personal purposes or used them for margin trading. Among other things, he opened fictitious accounts for an alleged increase in profitability. Cotten’s wrongdoing resulted in trading account losses and affected Quadriga’s reserves.
Ernst & Young went to court with a request to determine the date of the conversion, and also asked the court to consider claims with minor errors. The report shows that some of the claims contained errors, including incorrect account numbers, lack of witnesses or signatures. Approximately 30% of the total number of claims have flaws or inaccuracies. Ernst & Young asks the court to take this into account and proceed with the calculation of compensation. The trustee believes that finding and fixing faulty forms will be very costly and time consuming.