Former users of QuadrigaCX, a Canadian cryptocurrency exchange that went bankrupt, will be reimbursed 13% of their total claims, as stated in a notice to creditors released by Ernst & Young (EY), the accounting firm overseeing the bankruptcy proceedings.
The filing reveals that QuadrigaCX owes a total of CAD $303.1 million ($222.3 million) to 17,648 creditors, including Canada Post and the Canadian tax authority, Canada Revenue Agency (CRA). Among the creditors, there are 15 claims exceeding CAD $1 million, while 28 claims range between CAD $500,000 and $999,999. The majority of creditors, around 15,356, are owed amounts ranging from CAD $0 to CAD $10,000.
The filing further explains that each creditor will receive 13.094156% of their proven claim after deducting the levy amount payable to the Office of the Superintendent of Bankruptcy under the Bankruptcy and Insolvency Act (BIA). This interim dividend accounts for approximately 87.0% of the funds currently held by the trustee, with the remaining amount reserved for future disbursements related to the bankruptcy administration. The final distribution will occur at a later date.
Following QuadrigaCX’s collapse in 2019, where the CEO Gerald Cotten’s mysterious death in India resulted in the loss of private keys to the exchange’s wallets, the Ontario Securities Commission conducted an investigation. By June 2020, they officially concluded that Quadriga was a Ponzi scheme and fraudulent. Cotten had engaged in fraudulent activities by creating accounts under aliases and fabricating currency and crypto asset balances, deceiving unsuspecting clients. The case garnered significant attention and was featured in a popular Netflix documentary released in 2022.
Although some of the owed funds will be repaid to customers, a substantial amount remains missing. Ernst & Young, the bankruptcy trustee, has thus far recovered only $34.3 million worth of cryptocurrency from the estate. Chainalysis, a cryptocurrency tracking firm, previously stated that the funds either never arrived or disappeared shortly after. The exact fate of the customers’ funds and how QuadrigaCX utilized them remains an unresolved mystery.