The QuadrigaCX Saga Continues: Interim Dividends and the Path to Crypto Asset Re...

In the aftermath of the infamous QuadrigaCX bankruptcy, hope surfaced for the beleaguered creditors. As of April 15, 2019, creditors are slated to receive financial compensation corresponding to the value of their lost digital assets.

QuadrigaCX Bankruptcy: The Road to Recovery Begins 

As the saga of QuadrigaCX, Canada’s once-largest cryptocurrency exchange, continues to unfold, its creditors are bracing for a modest recovery of their claims. As part of an interim dividend payout, creditors with substantiated claims are set to receive 13.094156% of their proven claim. However, less the fee due to the Office of the Superintendent of Bankruptcy under the Bankruptcy and Insolvency Act (BIA), as per the bankruptcy trustee Ernst & Young (EY).

EY’s announcement on May 12, 2023, reveals that this interim dividend equates to a distribution of approximately 87% of the funds currently held by the trustee. The remaining capital will be retained as a reserve for future disbursements tied to the bankruptcy administration. Final distribution is projected at a subsequent date.

Quantifying the Claims: The Crypto Loss Landscape

EY’s notice reveals the staggering scale of the QuadrigaCX collapse, with 305.6 million Canadian dollars ($223 million) worth of claims made by 17,648 creditors. Most creditors, 15,356, are owed amounts ranging from $0 to $10,000. A significant portion, 1,784 creditors, have claims between $10,000 and $49,999.

Meanwhile, 15 creditors are owed more than $1 million, including the Canada Revenue Agency, which is owed 11.7 million Canadian dollars in back taxes from 2016 to 2018.

The QuadrigaCX bankruptcy hit hard on those who held digital assets on the platform during its downfall in 2019. As per the compensation plan, these crypto holdings have been converted into their monetary value as of April 15, 2019. For instance, a creditor who held one Bitcoin will eventually receive 6,739 Canadian dollars ($4,933), with 13% of this soon to be released as an interim dividend.

The Path Forward: Interim Dividends and Anticipated Timeline

The timeline for the distribution of interim dividends remains undisclosed. However, Miller Thomson, the legal firm representing the creditors, hinted on May 8, 2023, that the distribution could occur over the ensuing weeks.

QuadrigaCX, once hailed as one of Canada’s largest crypto exchanges, fell into insolvency in early 2019. The situation worsened following the untimely demise of its co-founder and CEO, Gerald Cotten, who took the private keys to QuadrigaCX’s offline storage systems to the grave. 

That has left thousands of creditors in the lurch, awaiting the resolution of this unprecedented crypto bankruptcy saga.

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