It’s Official: QuadrigaCX Crypto Exchange Declares Bankruptcy

The popular QuadrigaCX crypto exchange that found its way to our blockchain news headlines officially declared bankruptcy.

The exchange filed for bankruptcy after the failed attempt to recover and restructure the company. The decision was approved by a Nova Scotia judge according to reports.

After the news that the CEO of the exchange died in India from Crohn’s Disease complications, the exchange went offline by the end of January. The company stated they were looking for protection from creditors during going bankrupt.

All of the company’s associates and related companies were granted protection in February. However, no assets could be located and without the CEO’s key to cold wallets, recovering the lost funds turned out to be impossible.

On April 8^th, it came to an end of the legal procedures and it presents some hope that the court-appointed auditor will have some more time in the future to locate whatever is left from the funds.

After the exchange went offline, more than $260 million of crypto and cash combined got lost. Among that, more than $190 million worth of crypto assets including Ether and Bitcoin were left inside the platform’s cold storage wallets to which the only one that has access was the exchange CEO.

More than 112,000 users lost their investments and funds. The new court order states that Ernst and Young now have control over the real estate of the CEO along with Gerald Cotten’s wife Jennifer Robertson’s asset. Robertson will be able to use the funds under the close supervision of the company.

Having the authority, Ernst and Young demand all of the documents and witnesses testimonies, users can more likely gain access to their lost funds rather than before. However, many believe that the exchange does not even have cold wallets. For example, Taylor Monahan, the CEO of MyCrypto stated that QuadrigaCX is unlikely to have cold wallets let alone crypto assets in the wallets.

Others pointed out that there are a number of important elements that remain suspicious still. QuadrigaCX CEO legally changed his will only two weeks before he died. The founder of the exchange Michael Patryn turned out later that he had changed his identity from Omar Dhanani who was a convicted felon.