Topic: Unofficial Quadriga Cx Thread (Read 24347 times)

Can finally say the settlement is here 13.094156% on assets
87% of the Total Distributed in Lump Sum 13% held for a final distribution for any debated claims
Taxes paid may need to update your losses
If your claim was disputed check and follow up to get a payout everyone who was approved no action required unless you need to update your address it's been a while

Check Claim ID at EY
Bankruptcy -> Notice to Cred. 300pg pdf update. Getting 13% of $ back. All claims posted (no names, just userID)
https://documentcentre.ey.com/api/Document/download?docId=37250&language=EN
https://documentcentre.ey.com/#/detail-engmt?eid=342

Highlight's

Pursuant to section 148(1) of the BIA, the Trustee, with approval of the Inspectors, has declared an interim dividend for distribution to creditors with proven claims.  Each creditor with a proven claim will receive 13.094156% of their proven claim less the levy amount payable to the Office of the Superintendent of Bankruptcy pursuant to the BIA. 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.  

Additionally, since the First Interim Status Report, the Trustee provided various information and documents in the Trustee’s possession to the Canada Revenue Agency (“CRA”) in respect of its audit of Quadriga pursuant to subsection 231.2(1) of the Income Tax Act.  Following the audit, the CRA determined that Quadriga had not reported income during its 2016 – 2018 fiscal periods and as a result certain taxes were owing.  The Trustee subsequently responded to CRA requesting that certain losses of Quadriga be considered in the CRA’s analysis, which the Trustee believed should reduce the amount of unreported income.  The Trustee’s submissions were partially accepted by the CRA.  As result, the CRA has filed a revised claim in the amount of $11,787,528.17.  The Trustee, in consultation with the Inspectors, has accepted this proof of claim filed by CRA.

Table of Claim Rates locked in

 The rates for conversion as at the conversion date established by the Court are set out below:
 Denomination Rate
Bitcoin Cdn $6,739.08 / 1.00 Bitcoin  
Bitcoin Cash SV Cdn$78.84 / 1.00 Bitcoin Cash SV
Bitcoin Cash Cdn $419.37 / 1.00 Bitcoin Cash
Bitcoin Gold Cdn $22.14 / 1.00 Bitcoin Gold
Litecoin Cdn$104.84 / 1.00 Litecoin
Ethereum Cdn$223.45 / 1.00 Ether
U.S. Dollars Cdn$1.34 / US$1.00

Per this forum, the laptop seems to have been with lawyers this whole time claiming that they didn't have the passwords to login.  There are companies that specialize in getting into private encrypted devices.  The FBI has previously worked with an Isreali company  Cellebrite for cases like this.  I suggest the laptop should be handed over to a digital forensic crime team and let them work their magic.  If you are going to recover anything, my guess is the laptop will be the key.

Bitcoins are going there : https://twitter.com/whitestream5/status/1607328536985059328

NecroBump EY Statement on Coin movement

EY Statement
https://documentcentre.ey.com/api/Document/download?docId=36635&language=EN

NOTICE TO AFFECTED USERS
UNAUTHORIZED TRANSFER OF QUADRIGA BITCOIN
In the matter of the Bankruptcy of Quadriga Fintech Solutions Corp., Whiteside Capital
Corporation and 0984750 B.C. Ltd. D/B/A Quadriga CX and Quadriga Coin Exchange
(collectively the “Estate”).
The Trustee and Representative Counsel have become aware of an unauthorized movement of
bitcoin from certain cold wallets held by Quadriga. The cold wallets, listed below, were previously
noted in the First, Second and Third Reports of the Monitor in the CCAA Proceedings. As previously
reported, on February 6, 2019, the day after the Initial Order was granted in the CCAA proceedings,
Quadriga inadvertently transferred certain cryptocurrency into cold wallets that the Applicants were
unable to access.

Ernst & Young Inc. acting in its capacity as court appointed Monitor and subsequently as Trustee in
Bankruptcy worked with management and others to recover the bitcoin transferred to these
wallets. However, the private keys associated with the cold wallets have not been located despite
the detailed review. The locked bitcoin remained within the Quadriga cold wallets until December
16, 2022, prior to the unauthorized transfers being initiated. The Trustee confirms that it did not
initiate the transfers.

The Trustee and Representative Counsel are actively investigating the unauthorized transfers for the
benefit of the Estate. The addresses of the Quadriga cold wallets are as follows:

(a) 1MhgmGaHwLAvvKVyFvy6zy9pRQFXaxw;
(b) 1JPtxSGoekZfLQeYAWkbhBhkr2VEDAD;
(c) 1ECUQLuioJbFZAQchcZq9pggd4Ewcpu;
(d) 1J9Fqc3TicNoy1Y7tgmhQznWrP5AVLX;
(e) 1HyYMMCdCcHnfjwMW2jE4cv9qVkVDFU; and
(f) 1JZJaDDC44DCKLnezDsbW43Zf8LspCKBYP
Dated at Halifax, Nova Scotia, this 20th day of December 2022.
ERNST & YOUNG INC.
Licensed Insolvency Trustee
Trustee of the Estate of Quadriga Fintech Solutions Corp.,
Whiteside Capital Corporation and 0984750 B.C. Ltd.

-

Articles and Speculation is Cotten back, did he move the funds since he lost in FTX or Genesis etc and needed that BTC munching popcorn.

https://www.yahoo.com/entertainment/ey-did-not-initiate-transfers-110426750.html

Accountancy firm Ernst & Young has denied moving funds mistakenly transferred three years ago to inaccessible cold wallets associated with QuadrigaCX, the infamous Canadian crypto exchange that lost $190 million in user funds before its CEO died under mysterious circumstances.

On December 19, researcher ZachXBT flagged the movement of 104 Bitcoin ($1.7 million) split across five cold wallets, much of it to the privacy wallet Wasabi.

This Bitcoin had been dormant for over three years since employees at the collapsed exchange had “inadvertently” sent the Bitcoin to these wallets under the auspices of EY.

An alleged accomplice of Cotten, Michael Patryn, who reemerged in February 2022 under the pseudonym 0xSifu as part of the DeFi project Wonderland, said in response to ZachXBT’s findings this week that the funds had been transferred by a QuadrigaCX employee, “Alex,” acting under instructions from EY.

“They claimed to have accidentally lost the funds by sending to defunct wallets. Now it's suddenly moving again,” Patryn said. “Wen competence.”

ZachXBT
·
Dec 19, 2022
@zachxbt
·
Follow
Five wallets attributed to QuadrigaCX unexpectedly moved ~104 BTC on Dec 17 for the first time in years.

1ECUQLuioJbFZAQchcZq9pggd4EwcpuANe
1J9Fqc3TicNoy1Y7tgmhQznWrP5AVLXj9R
1MhgmGaHwLAvvKVyFvy6zy9pRQFXaxwE9M
1HyYMMCdCcHnfjwMW2jE4cv9qVkVDFUzVa
1JPtxSGoekZfLQeYAWkbhBhkr2VEDADHZB
0xsifu
@0xSifu
·
Follow
So... Alex, the dev at Quadriga, was instructed to send these coins while the company was under the control of Ernst & Young, three years ago. They claimed to have accidentally lost the funds by sending to defunct wallets. Now it's suddenly moving again. Wen competence.

https://twitter.com/0xSifu/status/1605005443847188480?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1605005443847188480%7Ctwgr%5Ef516e824f870515f35cfa5a72d61fb917214b0a3%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fdecrypt.co%2F117716%2Fey-did-not-initiate-transfers-1-7m-bitcoin-linked-defunct-quadrigacx

https://www.theglobeandmail.com/investing/article-quadrigacx-ftx-money-gone/

Some time last year, I stopped getting regular e-mail updates from Miller Thomson, even when updates were posted on its website. It appeared that I was taken off the list for some reason. I raised this with the law firm and was told: “We will ensure our database is updated.” I’m still waiting.

It feels as if we are no closer to getting our money back than we were when QuadrigaCX first collapsed. And now, with the recent revelation that more than 100 bitcoins previously held in inaccessible virtual wallets have been transferred, it feels as if we are even further away from recovering our funds.

In 2019, coins had been essentially misplaced under the watch of EY, when they were transferred to a digital wallet over which it had no control – the very trustee that was supposed to help the users. Now, neither EY nor Miller Thomson has any information on what happened. This does not exactly inspire confidence.

There is also the matter of the taxman wanting to wet his beak on the spoils. One of the reasons cited by Miller Thomson for why the Quadriga bankruptcy is dragging on this long is that the Canada Revenue Agency wants to conduct an audit to determine taxes owed by Quadriga.

Of the little money that remains in Quadriga, after paying off lawyers and the taxman, how much of it will trickle down to the users? I can’t say, but let me direct you to an even older such event.

In 2014, Tokyo-based cryptocurrency exchange Mt. Gox imploded and a New York private firm was going around trying to buy users’ claims for 10 cents on the dollar. Yet even now, no Mt. Gox user has seen a cent, as the case meanders through the Japanese bankruptcy process.

For those who used FTX as your exchange of choice, no doubt, your experiences will be similar to mine. Treat your money as already gone. It will be less heartache.

May be worth starting a class action in light of EY sending it directly to Cotten mismanagement of funds under management.
https://www.reddit.com/r/QuadrigaCX/comments/zrsb4g/class_action_lawsuit_against_ey/

Well EY said they were in the reports of the monitor I assume the rest of the addresses are in those reports

Are you still following the case ?

Necrobumping this, but looks like Michael Patryn (a.k.a Quadriga's co-founder) is back, now as "0xSifu" the CFO of a huge DeFi project called Wonderland ($TIME). He had around $400 million worth on his public wallet this morning.

Twitter thread about this: https://twitter.com/zachxbt/status/1486591682728673282

The founder of the project, Daniele Sesta, also founded another project called Abracadabra which is responsible for the crypto-backed stablecoin Magic Internet Money (MIM), with a supply of $4.6 billion. Both projects were planned to merge through a proposal. The interesting thing is that one of the guys responsible for Abracadabra is called 0xM3rlin, very similar to "Merlin", the codinome of Giancarlo Devasini, Tether's CFO. Daniele Sesta is also a big friend of the Tether's guys and I've seen him defending them a lot on Twitter. MIM was recently listed on Bitfinex. Coincidence or big conspiracy?

Interesting.
Is there any information about all the addresses associated with Quadriga exchange and if any coins have been moved or not?

It's not easy to know all the details about this case and mystery around Quadriga exchange and CEO Gerald Cotten but maybe new documentary movie called Dead Man's Switch.
Movie should be finished this month.

This thread has not been updated for years felt like reviving it as we have a few legal precedents being argued as of Jan 19 2021
Supplementary Report of the Trustee - 19 Jan 2021 - 7675 KB
https://documentcentre.ey.com/api/Document/download?docId=32800&language=EN

TLDR: The settlement of losses must share a common date, individual loss dates would add a significant burden to legal settlement times to the extent of 17000 individual claim valuations. QuadrigaCx acted as a securities or derivatives firm due to the way custody was held.

Summary of Legal Case:

The debate was whether the claim should be based on the date of CCCA receivership or the Date of Bankruptcy and on how to value Cryptocurrency.
The legal argument for the CCCA date was that it would have been equitable as this was the date where funds were frozen and unable to be taken out of the exchange, meaning that users were not able to mitigate their losses at this time. Ernst and Young argued that the claim should be enacted on the date of bankruptcy.

BlockCAT has made a claim of 4 million Canadian dollars (US$3.14 million). Seeking to maximize its payout, it has brought a motion arguing the date for valuing cryptocurrency claims of other users should commence from the exchange’s initial court order with respect to the Companies’ Creditors Arrangement Act (CCAA).

The issue at hand pits Quadriga’s former users who had predominantly cryptocurrency claims against creditors who predominantly have claims for fiat currency. In total, Quadriga users have made 17,053 claims with a value of either CAD$224 million or CAD$291 million, depending on the date used for asset valuation.

The trustee has to pay out claims made for cryptocurrency and U.S. dollars in Canadian dollars, meaning the court must decide on a date for valuation before it can proceed with disbursement.



The result of the court case will set a novel precedent in Canadian Law
No bankruptcy court in Canada has previously been asked to determine as to what date claims made in cryptocurrency should be valued in Canadian dollars.

--

What occurred Trustee disagreed with BlockCAT's claim for two key reasons

(a) First, the Cryptocurrency Claims are liquidated claims and not contingent or unliquidated claims as submitted by BlockCAT;
(b) Second, if BlockCAT’s argument is accepted, that the Cryptocurrency Claims are unliquidated claims and mitigation obligations are relevant, then the logical
conclusion would be that the date for valuation of each of the Cryptocurrency Claims may not be the CCAA Date but different dates unique to each individual Affected User’s claim scenario.

-

The trustee then broke down the facts that Quadriga was intended to operate like a traditional securities brokerage institution in so much as Affected Users could view their individual account holdings but their funds and cryptocurrency were maintained in the custody of Quadriga in general pooled accounts pending further Affected User transactions.

However, Quadriga did not segregate Affected Users’ funds and Quadriga funds, and Affected Users’ funds were used for various purposes beyond funding withdrawals to Affected Users, including funding operating expenses and payments to related parties.

All fiat currency and cryptocurrency were provided to Quadriga on the basis that it would be traded using the Quadriga platform. These funds were commingled with all of
Quadriga’s available reserves and in many instances either disbursed to an Affected User with a queued withdraw request or transferred to entities not controlled by Quadriga or directly to Mr. Cotten. In such circumstances, the commingled assets available for distribution are not traceable to any particular Affected User

As a result In their assessment, this custody model—whereby Quadriga retained custody, control and possession of its clients’ crypto assets and only delivered assets to clients following a withdrawal request—meant that clients’ entitlements to the crypto assets held by Quadriga constituted securities or derivatives.

They then went into a breakdown and rebuff of BlockCAT's arguments and how using various dates would cause issues as different users would have different claim dates, with various ones used as examples.

The Quadriga platform, for example, was plagued with liquidity concerns and withdrawal issues long before the CCAA Date. Accordingly, the date of breach for some Affected Users may be much earlier than February 5, 2019 if they tried and failed to withdraw funds prior to that date, which some Affected Users did indeed try to do.

Reasonable alternative dates of breach include the date of an individual Affected Users’ failed withdrawal request; the date of Mr. Cotten’s death; the date when the Quadriga platform was shut down; the CCAA Date; the Date of Bankruptcy; and the date of the Monitor’s Fifth Report, which first outlined Quadriga’s potential misconduct and concluded that the “missing” cryptocurrency may never have actually existed.

BlockCAT suggests that the date of assessment for the Cryptocurrency Claims should also incorporate a reasonable mitigation period. If BlockCAT is correct, then each
Cryptocurrency Claim will have its own corresponding and unique reasonable mitigation period, just as each Cryptocurrency Claim has a unique date of breach.
Questions such as “When did each Affected User become aware of the breach?”, “Were they in a financial position to mitigate their loss by purchasing replacement cryptocurrency?”, and “What is reasonable mitigation?” would have to be considered. The burden in establishing the mitigation obligation would rest with the Trustee

If Cryptocurrency Claims are to be assessed as of the date of breach, and a relevant mitigation period, as suggested by BlockCAT, then it follows that each Cryptocurrency Claim may have its own unique date of breach and mitigation period depending on the facts specific to that Cryptocurrency Claim. Therefore, there may be potentially hundreds of unique dates to assess each of the Cryptocurrency Claims.

Should this Court ultimately find that the Cryptocurrency Claims should be assessed as unliquidated claims and the Date of Bankruptcy is not the appropriate date for valuing these claims, then the Trustee submits that a single date should still be selected for valuing all Cryptocurrency Claims. This conclusion would be more in line with the principles of efficiency and economy applicable to bankruptcy claims administration than would be the case if the Trustee was required to incur the time and expense to carry out 17,000 individual claim valuations.

As stated above, the Trustee is of the view that the applicable provisions of the BIA, as well as the principles of efficiency and economy underlying determination of claims under the BIA, dictate that the Date of Bankruptcy should be chosen as the date to assess the Cryptocurrency Claims. The logical conclusion of valuing the Cryptocurrency Claims using the principles outlined by BlockCAT could be a near-administrative impossibility and would significantly erode recoveries to the Affected Users.

--
Bonus detail was reading up on Tether and a question came to mind who are Crypto Capital
https://amycastor.com/2019/01/17/the-curious-case-of-tether-a-complete-timeline-of-events/
https://amycastor.com/2021/02/14/news-tether-now-prints-1b-at-a-time-tesla-buys-bitcoin-roubini-calls-saylor-a-cokehead-scammers-hijack-quadrigacx-website/
She may not be a crypto user however her research is top notch

Yeah I remember a lot of talk of this when he first died, but I guess I figured they would have verified the corpse as it arrived in Canada. Just seems like something you do regardless when a dead body comes back in the country before just being like "okay he gone." either way I guess you might as well grasp at straws because there doesn't seem to be much left to be found, and I doubt they will be able to win the argument for all of the wife's inheritance/wealth.
Might just not be looking hard enough lol.

I cannae believe someone isn't taking bets on whether the body turns out to be real or not. You could win back the property of yours that he burnt if you guessed it right.

If it does turn out to be him, at least his victims can berate his skeleton and toss it in the Tiber.

This is weird. The CEO of Quadriga Cx died suddenly and many people were suspicious of him faking to scam speculators who sent money into the exchange. I think this makes sense, lately there have been too many large exchanges that cheated people's money by fleeing or failing to resolve withdrawals for customers, ... if this is true I also want to be able to accurately confirm the cause of death and the image of this CEO. If everything is unclear then people will sue this business for tricks to cheat.

It's creepy but perhaps not unreasonable. India is infamous for its fake birth/death/marriage certificate racquets, and the circumstances of his death are extremely suspicious. Gets married, sets up a will, then up and goes to India to open an orphanage while suffering from Crohn’s? He has the foresight to plan for his personal affairs after death, but does nothing to secure the exchange's funds?

Quadriga's clients are out $200 million. They don't believe this story, and who could blame them? Confirming that he's actually dead seems like an easy way to nip this issue in the bud.

Well the next step in the QuadrigaCX saga starts getting creepy. Looks like they are trying to exhume the body to confirm that he is in fact dead. I have no idea how often these requests actually get through but there must be enough of a reason to move forward with even requesting this. I saw it in the latest email, but here is a story

https://www.msn.com/en-ca/news/canada/lawyers-for-quadrigacx-customers-ask-rcmp-to-exhume-body-of-gerald-cotten/ar-AAK6InL?li=AAggNb9

Info about the liquidation here and a balance checker for those who have claims. If you have a claim to make then you need to do it by August 31st.

https://documentcentre.eycan.com/Pages/Main.aspx?SID=1445

https://userbalance.quadrigacxtrustee.com/

And this is why if some total stranger is going to take charge of my money I'm not going to do it unless there's some significant regulation they have to satisfy before they're permitted to.

I support regulation if it means it creates the inability of the stupid and/or dishonest to reach the market in the first place.

Yeah I was reading the story last night. I knew it was a bad scenario, but never quite imagined it was this bad. Might have picked up a few tricks from his founding partner with all the identity games he was playing to trade with client funds. I do feel I got off lucky with them considering the amounts of times I was holding balances there to set up a purchase or sell some off.

---

https://www.msn.com/en-ca/money/topstories/founder-of-crypto-exchange-quadriga-moved-users-funds-to-personal-accounts-ernst-and-young/ar-AADb1zM?li=AAggNb9

I knew they had Bots, but droids. hmmmm
"These are not the funds you're looking for"

Had a good laugh at that part. Then there was more about not filing personal tax returns, and when they were filed not claiming income from Quadriga. This guy was all over the map. I was amazed at how they apparently didn't file corporate taxes either. One reason being one of their methods of KYC was done through Canada Post.

> Mr.  Cotten  created  Identified  Accounts  under  aliases  where  it  appears  that Unsupported  Deposits  were  deposited  and  used  to  trade  within  the  Platform resulting in inflated revenue figures, artificial trades with Users and ultimately the withdrawal of Cryptocurrency deposited by Users; and
- 8 - (h)Substantial Funds were transferred to Mr. Cotten personally and other related parties. The Monitor has not located any support justifying these transfers.

Simple enough (╯°□°)╯︵ ┻━┻

https://twitter.com/evanmthomas/status/1141501872467001344

According to the latest report issued Quadriga was a flat out bucket shop and our corpse friend was siphoning off funds to do failed margin trading for many years. Presumably more will emerge about the name changing non corpse.

FBI is investigating the failed QuadrigaCX exchange, read more:

https://coincodex.com/article/3757/the-fbi-is-investigating-the-failed-quadrigacx-exchange-asks-victims-for-information/