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,…
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