Quadriga CX Customers to Finally Receive Payout: Creditors to Get 13% per Dollar   – Bitcoin News

EY, the global accounting and professional services organization, released a long-awaited update on Friday for the creditors of Quadriga CX. The Canadian cryptocurrency exchange, which had sought bankruptcy protection in 2019 with liabilities of C$215.7 million and assets totaling around C$28 million, had left its creditors in a state of uncertainty. In the latest notice from EY, it was revealed that Quadriga creditors will receive a payout equivalent to 13.094156% of the total value of their claims.

EY’s Update Offers Redemption for Quadriga CX Creditors With Haircut Compensation Plan

After enduring a protracted bankruptcy process that commenced in 2019, Quadriga CX‘s customers and creditors can finally breathe a sigh of relief as they are set to receive a payout from the estate. Once the dominant cryptocurrency trading platform in Canada, Quadriga faced a tumultuous journey as liquidity woes plagued the business in 2018.

The CEO, Gerald Cotten, met an untimely demise while traveling in India on December 9, 2018, as disclosed by his wife. Shockingly, it wasn’t until January 14, 2019, that the exchange finally informed its customers of Cotten’s death, and by the end of that very month, Quadriga sought the shelter of creditor protection.

Entrusted with the task of overseeing the bankruptcy proceedings, the accounting firm EY assumed the role of trustee, taking control of Quadriga’s remaining assets. As the months unfolded, shocking revelations emerged, exposing the fraudulent operations orchestrated by Cotten and his cohorts.

In a damning verdict delivered in 2020, the Ontario Securities Commission declared Quadriga a Ponzi scheme and a fraud. Fast forward to the recent update by EY on Friday, eagerly anticipated by the creditors, and it reveals that a reimbursement check is on its way. However, it comes with a caveat, as creditors will not be receiving the full amount they had claimed.

The EY document states:

Each creditor with a proven claim will receive 13.094156% of their proven claim.

In a revealing disclosure, EY outlines that the payout of 13% allotted to each creditor corresponds to “approximately 87% of the funds the Trustee is currently holding.” Interestingly, the accounting firm also highlights that a portion of the remaining funds will be reserved for future disbursements linked to the ongoing administration of the bankruptcy.

Within the document, an intriguing statistic emerges, indicating that Quadriga faced a staggering total of around 17,648 claims, with one notable claim arising from the Canada Revenue Agency (CRA).

Reports indicate that in the lead-up to its downfall, Quadriga failed to fulfill its tax obligations for a consecutive period of two years, resulting in a debt of $11.7 million owed to the Canada Revenue Agency (CRA). Moreover, creditors who are entitled to direct payments in various cryptocurrencies will also receive a fraction of their specific digital assets converted into Canadian dollars.

To illustrate, EY says if a creditor is owed a single bitcoin (BTC), their claim will be valued at C$6,739.08, while an ethereum (ETH) holder will receive C$223.45 for each unit owned. These asset valuations were determined based on the exchange rate prevailing on April 15, 2019.

What are your thoughts on the payout percentage and ongoing administration of Quadriga CX’s bankruptcy? Share your opinions and insights in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 7,000 articles for Bitcoin.com News about the disruptive protocols emerging today.