Embattled cryptocurrency exchange QuadrigaCX has received a reprieve from its creditor protection deadline as the search for nearly $200 million in missing virtual currency continues.
Nova Scotia Supreme Court Justice Michael Wood today granted the insolvent company a 45-day extension for a stay of proceedings at the request of lawyers who predicted a legal onslaught, should the request be denied.
That could take the form of bankruptcy orders or interim financial relief for any one of more than 100,000 Quadriga users.
“Such proceedings could be filed in multiple jurisdictions, they could be conflicting and you could effectively have a free for all,” Maurice Chiasson, one of Quadriga’s lawyers, told the court.
As it stands, a court-appointed monitor is working with the company to locate the assets, which have been lost since the sudden death in December of the company’s CEO and sole director, 30-year-old Gerald Cotten, who was the only person who had the encrypted pass codes.
Court documents say $190 million in missing Bitcoins and other cryptocurrency is locked in Quadriga’s offline digital wallets.
In addition to the stay of proceedings, Wood approved the appointment of a chief restructuring officer (CRO), who will eventually speak for Quadriga and work with the monitor, Ernst and Young. He said the CRO’s work must be approved in advance by the monitor to provide assurances that professional fees will not be “out of control.”
“The judge was concerned about cost and generally, and what the role of the monitor versus the CRO (is),” George Kinsman, senior vice-president of Ernst and Young, told reporters on Tuesday.
“This monitor has worked with the CRO, Peter Wedlake before, we’ll have good relationships and continue on.”
The judge also granted an order allowing the monitor to gain access to trading platform data stored in the cloud with Amazon Web Services.
The lawyers will appear in court again on April 18, when the judge will decide whether to stay the proceedings further. In the meantime, lawyers representing Quadriga’s users are assembling a committee of account holders to speak on behalf of those out of pocket.
— with files from The Canadian Press