Ernst & Young (EY), a leading accounting firm, has announced that former users of the now-defunct Canadian cryptocurrency exchange, QuadrigaCX, will receive 13% of their total claims. As per the notice to creditors published on Friday, each creditor of the exchange 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.”
QuadrigaCX owes CAD $303.1 million ($222.3 million) to 17,648 creditors, including Canada Post and Canada Revenue Agency (CRA), the country's tax authority. The list of creditors includes 15 claims with a value greater than CAD $1 million and 28 claims with a value between CAD $500,000 and $999,999, while 15,356 creditors are owed between CAD $0 and CAD $10,000.
“The interim dividend provides for a distribution of approximately 87.0% of the funds the Trustee is currently holding," the filing read.
In 2019, when the exchange company collapsed, most of its users had cryptocurrency assets. However, these holdings were converted to their corresponding monetary values as of April 15 of that year.
EY has reported that individuals with claims in Bitcoin will receive CAD $6,739.08 ($7,122.9) for each coin, while Ethereum claimants will receive CAD $223.45 ($299.45) per ether.
QuadrigaCX Allegedly Ran a Ponzi Scheme
In 2019, QuadrigaCX filed for bankruptcy protection after its CEO, Gerald Cotten, passed away under mysterious circumstances in India. It was later discovered that he was the only person with access to the exchange's wallet private keys.
This event prompted an investigation by the Ontario Securities Commission, which officially declared Quadriga a fraud and Ponzi scheme by June 2020. The commission found that Cotten committed fraud by creating fake accounts and falsely inflating currency and crypto asset balances, which he used to trade with unsuspecting clients.
The commission concluded that the fraud at Quadriga was a traditional scam using modern technology. The case has received significant attention in recent years and was the subject of a popular Netflix documentary released in 2022.
Although some of the customers' owed funds will be returned, a significant amount is still unaccounted for. The bankruptcy trustee, Ernst & Young, reported that only $34.3 million worth of cryptocurrency has been recovered from the QuadrigaCX estate.
In 2019, cryptocurrency tracking company, Chainalysis, stated that the missing funds were either never received or quickly disappeared.
"What Quadriga really did with the money that customers gave it to buy Bitcoin remains a mystery," the company said in a statement to Fortune.
