Quadriga CX Trustee raises $ 30 million for repayments to creditors, plaintiffs want $ 171 million instead

Trustee of the now defunct cryptocurrency exchange, Quadriga CX says the sell-off of the platform’s assets raised $ 30 million. This contrasts with the $ 171 million in credits that were presented to the trustee by Quadriga’s creditors. As a result, Ernst and Young (EY), the auditing firm in charge of administering Quadriga’s liquidation process, says it will not be able to repay all claims in full.

Disproportionate claims

As shown in a report, the trustee claims that he “received completed application forms from 17,053 creditors of the exchange while a total of 42,957 applications were submitted.” Explaining the higher number of claims filed against the actual number of creditors, the report suggests that some creditors may have signed more than one claim form.

In its motion in court, EY also reveals that complaints filed by users and creditors are composed of both cryptocurrencies and fiat. The motion lists the claimed cryptocurrencies as follows: 24,427 BTC, 7,723 bitcoin cash, 17,934 bitcoin gold, 7,098 bitcoinv, 65,457 ethereum and 87,031 litecoin.

However, EY claims that “about one-third of the forms have a defect” which, according to the auditing firm, will be too expensive “to track and fix”. Accordingly, the trustee wants the court to rule on his proposal to distribute the available funds fairly.

In his request, the trustee states:

EY demands that user compensation claims all have an equal footing, as determining who would prioritize distribution based on the claim would be inefficient, costly and a significant drain on real estate otherwise available for distribution.

Confirmation of incorrectness

Meanwhile, EY’s motion appears to validate some of the longstanding allegations against Cotten. Explaining the discrepancy between Quadriga’s assets and liabilities, the motion explains:

“Mr. (Gerald) Cotten proceeded to exchange these account balances with the affected users who had deposited real assets, as such, Quadriga’s assets probably never paid the liabilities owed to the affected users.”

Cotten’s death in December 2018 sparked controversy after it emerged that there were no provisions for the delivery or recovery of private keys for the exchange’s cold wallet. The exchange was subsequently closed a month later, leaving thousands of users in limbo.

Now, after nearly two years of waiting, Quadriga CX users and creditors should now get a portion of their funds back.

What do you think of the repayment offer presented to Quadriga CX creditors? Share your views in the comments section below.

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