Creditor protection extended for cryptocurrency exchange QuadrigaCX

HALIFAX — Embattled cryptocurrency exchange QuadrigaCX has received another reprieve from its creditors, as the search for nearly $200 million in missing virtual currency continues following the sudden death of the company’s co-founder.

Nova Scotia Supreme Court Justice Michael Wood on Tuesday granted the insolvent company a 45-day extension for a stay of proceedings.

“I’m satisfied that it’s appropriate to extend the stay,” he told the court. “There’s value in continuing it and the company — the applicants — are continuing to work in good faith.”

One of Canada’s largest cryptocurrency trading platforms, QuadrigaCX and its affiliates were granted creditor protection in Nova Scotia last month after the company’s CEO and sole director, 30-year-old Gerald Cotten of Fall River, N.S., died suddenly in December while travelling in India.

According to court documents, he was the only person who had the encrypted pass codes needed to access $190 million in missing Bitcoins and other cryptocurrency locked in QuadrigaCX’s offline digital wallets.

Another $70 million in cash is owed to Quadriga users, much of it tied up in bank drafts held by third-party payment processors.

The extension for creditor protection, until April 18, allows the court-appointed monitor to continue searching for the missing digital assets.

Meanwhile, a lawyer representing QuadrigaCX asked the Halifax court to appoint a chief restructuring officer to represent the company and potentially oversee a future sales process.

“There are a number of third parties floating around that have expressed an interest in acquiring the platform,” Maurice Chiasson told the court.

“We think that there’s a benefit to having this position appointed now … And then ultimately once we get into a sales process, we’re going to need someone that’s knowledgeable about the business.”

In addition, Chiasson said Cotten’s widow, Jennifer Robertson, has no experience in the cryptocurrency field and would prefer not to oversee the company.

“She wants to co-operate, she wants to be helpful, but she wants to be out of the limelight,” Chiasson said.

Elizabeth Pillon, a lawyer representing the monitor — Ernst and Young — expressed support for having an independent director in charge of QuadrigaCX.

She said there is a potential issue with having Robertson, the executor of her late husband’s estate, involved in the creditor protection process.

“From that perspective, having some independence is also important from the monitor’s perspective,” she said.

Pillon added that “the existing directors did not have prior experience in this company and also have expressed some reluctance, given the notoriety of the situation.”

The judge approved the appointment of a chief restructuring officer, but said their work must be approved in advance by the monitor to ensure professional fees will not be “out of control.”

Gavin MacDonald, a partner at Cox & Palmer — one of two law firms representing roughly 115,000 affected QuadrigaCX users — expressed concern with a cash flow projection that would have seen Robertson reimbursed for costs associated with the company.

“We are concerned about the repayment by the applicants of $300,000 to Ms. Robertson in the first week of March contemplated by the filed cash flow projection,” MacDonald said in a letter to the judge.

QuadrigaCX’s lawyer said the issue could be addressed at a later date.

Meanwhile, the judge also granted an order allowing the monitor to gain access to trading platform data stored in the cloud with Amazon Web Services, based in Seattle, Wash.

Just Posted

WATCH: UCP leader Jason Kenney makes stop in Red Deer

A rally was held in the north end of the city Saturday afternoon

Good-bye ice and snow, hello potholes on Red Deer roads

City workers will be spending 20 hours a day on various road repairs

Fog advisory in effect for Red Deer, central Alberta

Heavy fog is affecting visibility for central Alberta drivers Saturday morning. A… Continue reading

Climate change’s impact on outdoor hockey discussed in Red Deer

Red Deer River Watershed Alliance held a forum Friday at the Alberta Sports Hall of Fame

Collision between Red Deer transit bus and truck investigated by RCMP

No one on bus was hurt, truck driver had minor injuries

WATCH: Fashion show highlights Cree designers

The fashion show was part of a Samson Cree Nation conference on MMIW

Montreal priest stabbed during mass leaves hospital; suspect to be charged

MONTREAL — A Catholic priest who was stabbed as he was celebrating… Continue reading

No winning ticket for Friday night’s $35.7 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $35.7 million jackpot… Continue reading

New report details impact of proposed NS spaceport in event of explosion or fire

HALIFAX — The head of a company proposing to open Canada’s only… Continue reading

Quebec man convicted in Mafia-linked conspiracy deported to Italy

MONTREAL — Michele Torre, a Quebec man convicted in 1996 for his… Continue reading

Republican Karl Rove says conservatives need more than simplistic slogans

OTTAWA — Legendary Republican campaign strategist Karl Rove, known for his no-holds-barred… Continue reading

B.C. hospital’s use as shelter ‘clarion call’ about housing crisis, says mayor

The 10-bed regional hospital that serves the medical needs of 5,000 people… Continue reading

Puddle splashing: A rite of spring

Is there anything more fun than driving through water-filled potholes in the… Continue reading

Special evaluations can help seniors cope with cancer care

Before she could start breast cancer treatment, Nancy Simpson had to walk… Continue reading

Most Read