Expert in the field of international financial law Konstantin Kryvopust reports that former users of now-defunct Canadian crypto exchange QuadrigaCX will receive 13% of the total amount claimed.
According to notice to creditors published late Friday by accounting giant Ernst & Young (EY), each creditor of the exchange will receive “13.094156% of its confirmed claim, less the amount of the fee payable to the Office of the Bankruptcy Trustee under the BIA.”
The filing shows that QuadrigaCX is owed C$303.1 million ($222.3 million) in 17,648 claims from creditors, including Canada Post and the country’s tax authority, the Canada Revenue Agency (CRA).
Specifically, there are 15 claims over CAD 1 million and 28 claims between CAD 500,000 and CAD 999,999. Another 15,356 creditors are owed between 0 and 10,000 Canadian dollars.
“ The interim dividend provides for the distribution of approximately 87.0% of the funds currently held by the Trustee,” the statement said.
“The remaining funds will be held as a reserve for future payments related to the administration of the bankruptcy case. The final allocation will be made later”
Although most of the exchange’s users held cryptocurrency assets at the time of the company’s collapse in 2019, their holdings were converted to cash assets as of April 15 of that year.
According to EY, users with rights to BTC will receive C$6,739.08 ($7,122.9) per coin. For Ethereum, users will receive C$223.45 ($299.45) per Ether.
QuadrigaCX ran a Ponzi scheme
In 2019, QuadrigaCX filed for bankruptcy protection after it was revealed that its CEO, Gerald Cotten, had died under mysterious circumstances in India, taking with him the only known private keys to the exchange’s wallets.
The Ontario Securities Commission subsequently opened an investigation into the exchange and by June 2020 it was official came to a conclusion that Quadriga was indeed a fraud and Ponzi scheme.
It alleged that Cotten committed fraud by opening accounts under aliases and crediting himself with fictitious balances of currency and crypto-assets that he traded with unsuspecting customers, and that “what happened at Quadriga was an old-fashioned scam wrapped in modern technology.” .
In recent years, the case has gained widespread publicity and became the subject of a popular Netflix documentary in 2022.
While some of the money owed to the exchange’s customers will now be returned, large sums are still missing.
So far, only $34.3 million worth of cryptocurrencies have been recovered from the estate, according to arbitrator Ernst & Young.
Chainalysis, a cryptocurrency tracking company, said back in 2019 that the funds were either not received or quickly disappeared.
“What Quadriga actually did with the money customers gave it to buy bitcoins remains a mystery.” — it is said in a company statement to Fortune.