A judge in Canada has granted embattled crypto exchange creditor protection in a court ruling that took place on Feb. 5. The Canadian crypto exchange went offline last week before announcing that it was experiencing trouble locating a significant amount of its cryptocurrency reserves. To protect itself from litigation from customers, it filed for protection under the Companies’ Creditors Arrangement Act (CCAA).
Quadriga CX problems began last month when the platform’s CEO Gerald Cotton passed away in possession of the private keys for cold wallets that stored a significant amount of virtual assets for its customers.
According to Jennifer Robertson, the widow of the deceased, there is about $180 million (CAD) that is floating around in cold storage and efforts to retrieve the assets have experienced limited success.
The Crypto Exchnage Has One Week To Serve All Its Clients With the Order
However, the ruling from the judge was expected as Christine Duhaime; a financial crimes attorney had previously explained. Speaking to CoinDesk on Jan 4 she said that she anticipated the crypto platform would receive the protection. Adding that EY a professional services firm would be appointed to monitor and oversee the ongoings at Quadriga CX over the next few months.
This turned out to be right after the ruling as EY was appointed by the judge to monitor the exchange. EY has now been tasked with helping the crypto exchange to quickly recover any assets that can be sold off to reimburse around 90,000 to 115,000 clients that had their funds locked up at the exchange.
Michael J. Wood who is the judge overseeing the case said:
“I’m satisfied that the order under the CCAA ought to be issued today. I’m going to issue the order effective today.???
Now Attorneys of the applicants have five days to serve all the customers of the exchange that are owed funds with a notice of the order.
An initial filling by EY indicated that the company would focus on determining if there were any reserves in cold storage and how they would access them. During the hearing, a representative of the firm said that the exchange would set up a wallet where they would store any assets that are recovered.