EY’s Latest Report Reveals Assets and Debts of Now-Defunct Crypto Exchange QuadrigaCX
Major audit firm Ernst & Young (EY) has released a report that lists all the assets and debts of QuadrigaCX, a now-defunct Canadian-based cryptocurrency exchange.
The report, which also includes assets and liabilities of the collapsed exchange’s subsidiaries, was published on EY’s website on May 9.
The Big Four firm is the court-appointed monitor of the exchange’s creditor proceedings and has published several reports since early this year.
The latest EY among these reports is a preliminary trustee’s statement that reveals the Canadian exchange’s assets amount to about $20.8 million. And by April 12, 2019, Quadriga’s liabilities totaled roughly $160 million.
As per the report, the crypto exchange’s has its assets and debts spread across three of its subsidiaries. There is 0984750 B.C. LTD., which is the “Quadriga Estate”; the second company is Quadriga Fintech Solutions, and the third subsidiary is Whiteside Capital Corporation.
In April this year, Nova Scotia Supreme Court Judge, Justice Michael Wood, declared Quadriga to be bankrupt. The official pronouncement followed a recommendation from EY advising that the collapsed exchange’s proceedings be moved from creditor protection to bankruptcy proceedings.
EY noted at the time that declaring bankruptcy was in the best interests of the creditors as it allowed for the sale of would-be assets, “including but not limited to Quadriga’s operating platform.”
It would also help streamline administrative burdens as well as considerably cut costs related to the process.
Troubles for Quadriga surfaced publicly after the sudden death of its co-founder and CEO Gerald Cotten.
The exchange moved to court to seek a stay of proceedings, alleging that they could not access millions of dollars worth of cryptocurrency owed to customers and which had been stored in the exchange’s cold wallets.
As part of the filing for creditor protection, Quadriga stated that its team could not access the crypto in cold wallets as the late Cotten had been the sole custodian of the wallet’s corresponding private keys.
In March, EY released a report that revealed the exchange had maintained six separate bitcoin (BTC) wallets. But, according to the report, these wallets were empty and had remained unused for a long time.
The monitor noted that other than a single BTC transaction worth roughly $500,000, inadvertently sent to one of the wallets, there were no deposits into any of the alleged cold storage addresses since April 2018.
An affidavit filed by Cotten’s widow also revealed that the late CEO mixed funds the exchange’s corporate funds with his own money in the months leading to its collapse.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.