A Canadian judge has postponed a ruling on judicial representation for clients of Canadian cryptocurrency exchange QuadrigaCX. A team of counselors from top law companies met in a court in Halifax, Nova Scotia, to obtain the permission to represent lenders in the continuing QuadrigaCX case. After the complete hearing, the judge wouldn’t deliver a verdict on which company would present attorney for QuadrigaCX’s customers, though he affirmed a ruling within the week, reported Bitcoin Magazine.
More than a Dozen Lawyers
115,000 customers owed as much as $260M in funds and cryptocurrency after QuadrigaCXfounder’s death. More than a dozen lawyers met on a Halifax courtroom on February 14, 2019, to present their offerings to serve creditors owed $260 million in the QuadrigaCX cryptocurrency disaster. Three groups of lawyers have demanded to the Nova Scotia Supreme Court to serve 115,000 cryptocurrency dealers owed $70 million in cash and $190 million in Bitcoins and other digital assets.
Justice Michael Wood said that he would announce a written judgment in the matter within a week. In the meantime, the counselor selected by the court, Ernst & Young, has unveiled that at the prevailing scene the exchange owes CA$100,000 ($75,000) to the advocates, while Quadriga claims that “as of today, we don’t have anything.”
During the concourse, the Justice Michael Wood listened statements from the four law companies that lenders have used to for advice, particularly, Bennett Jones LLP; Osler, Hoskin & Harcourt LLP; McInnes Cooper LLP and latecomer Goodmans LLP.
Christine Duhaime of Duhaime Law stated
The decision to delay the appointment of representative counsel is a sound one. The Court needs to be able to select the right firm that can present Canadians across the country with expertise and in a cost-effective manner. Most users are in British Columbia and Ontario and so firms with solid representation there would be key so that customers from those provinces have access to the process.
Jack Julian, a journalist for news outlet CBC, tweeted the courtroom procedures, summing up a total of 18 lawyers who were present at the hearing. One of these, Maurice Chiasson, represented QuadrigaCX while another represented Ernst & Young, The other represented some 200 customers hit by the exchange’s failure to acknowledge retreats. These customers reportedly have $50 million CAD in the exchange in the consequence of the death of its founder and CEO, Gerald Cotten. The $50 million CAD described today is just a portion of the $250 million CAD money that the exchange owes its clients.
Just a few days ago, Quadriga had stated its clients have accounts with a whole balance of about C$250 million. Only approximately C$70 million of those client funds is in cash. About C$180 million, or about $136 million, is in cryptocurrencies kept in a stock account managed on Mr. Cotten’s laptop, the firm stated in its insolvency filing. Quadriga would require the power of that account to transfer those cryptocurrency reserves to clients.
After the hearing, the court also directed plenty of notable points in the case, including the nonexistence of $30 million CAD value of bank draft notes that QuadrigaCX insists that it is owed by its payment processing allies. QuadrigaCX is proceeding rush to obtain these funds as most of the $300,000 CAD it has in its territory for judicial fees are almost spent.
James Edwards, a cryptocurrency researcher who writes research on a website called Zerononcense, stated that it looks that there are no identifiable cold wallet savings for QuadrigaCX. He further said that QuadrigaCX was operating collaterals from their clients to reimburse other clients once they obliged their withdrawal. It does not seem that QuadrigaCX has failed access to their Bitcoin holdings. The amount of bitcoins in QuadrigaCX’s ownership is considerably less than what has described in Jennifer Robertson’s (wife of purportedly dead CEO and founder Gerry Cotten) testimony, tendered to the Canadian courts on January 31st, 2019.
James Edwards further revealed that QuadrigaCX has not been true with profits to their inability to secure the funds needed to pass client retreat applications. In fact, it is nearly unlikely to believe that this is the problem in lieu of the experimental proof presented by the blockchain. After executing the examination, he further said that the obstacles in fulfilling crypto withdrawals to clients were because the QuadrigaCX really did not have the funds. In some circumstances, QuadrigaCX was made to wait for sufficient client collaterals to be fulfilled on the exchange before concocting crypto withdrawal applications by their clients.