Key takeaways:
- 87% of the funds that the Trustee of the defunct exchange now has will be distributed to users as part of the interim distribution.
- As of April 15, 2019, the creditors will get payment equal to the value of their lost cryptocurrency assets.
QuadrigaCX, a bankrupt Canadian cryptocurrency exchange, will pay 13% of its creditors’ overall claims as part of an “interim dividend.”
In a notice to creditors dated May 12, QuadrigaCX’s bankruptcy trustee, Ernst & Young (EY), stated that each creditor with a valid claim would get 13% of that claim’s value, less any levy payments due to the Office of the Superintendent of Bankruptcy in accordance with the BIA.
According to documents from EY, the estate of Quadriga owes 17,648 creditors a total of CAD 303.1 million ($222.3 million), including Canada Post and the country’s tax collection agency, the Canada Revenue Agency (CRA). EY also said:
“The interim dividend provides for a distribution of approximately 87.0% of the funds the Trustee is currently holding. The remaining funds will be held as a reserve for future disbursements related to the administration of the bankruptcy. A final distribution will be made at a later date,”
According to EY, fifteen thousand three hundred fifty-six creditors are due between $0 and $10,000, while 1,784 owe between $10,000 and $49,999. The Canada Revenue Agency owes 11.7 million CDN in past taxes from 2016 to 2018, yet there are only 15 creditors who are owed more than $1 million.
Even though most of the exchange’s former users had crypto assets at the time of the company’s demise in 2019, their purported holdings were translated into the asset’s market value as of April 15 of that year. As a result, someone who owns 1 Bitcoin at the moment will eventually receive $6,739 CDN ($4,933) back, with 13% of that amount coming immediately as an interim dividend.
Although a date has not been set for the distribution of the interim dividends, Miller Thomson, the law firm defending the creditors, hinted on May 8 that it would occur soon.
Before going bankrupt in the early months of 2019, QuadrigaCX was one of Canada’s biggest cryptocurrency exchanges. Gerald Cotten, the company’s co-founder and CEO, passed away in India shortly after being buried with the secret keys to QuadrigaCX’s offline storage systems.
The most prominent cryptocurrency exchange in the world, Binance, has recently decided to stop operating in Canada. Binance’s action comes in the wake of a notification from the Canadian Securities Administrators forbidding cryptocurrency trading platforms from allowing Canadian clients to enter into contracts to purchase and sell any cryptocurrency asset that is itself a security or a derivative.
