A Canadian exchange QuadrigaCX has announced the loss of its wallet causing it difficulties in locating customers’ funds. This became known after the firm filed for protection with the Companies’ Creditors Arrangement Act (CCAA), the agency that is in charge of bankruptcies in the country.
Quadriga is the second Canadian exchange to announce loss of funds in recent months. In the Q4 of 2018 Maple Exchange another exchange based in the country had announced that it lost customers funds under very suspicious circumstances.
Death of Founder CEO
The Quadriga losses may not be unconnected with the demise of its CEO weeks ago. A January 14 release by the exchange announced the CEO and founder’s death saying:
“Please see our statement regarding the sudden passing of our @QuadrigaCoinEx founder and CEO, Gerry Cotten. A visionary leader who transformed the lives of those around him, he will be greatly missed”
Questions About Managerial Competence
As empathetic as the news is, it was unexpected that it could lead to the loss of the company’s cold wallet which has led it to file for bankruptcy.
In a statement on the issue, Quadriga stated,
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.”
Financial analysts conversant with Canadian laws admitted that the exchange will be protected by the CCAA since it is not a bank or trust. This however has not answered the many questions begging for explanation.
The exchange was in the news in October 2018 after it was announced that its funds were frozen by a bank. It was the highest crypto trading exchange in Canada by volume before its demise.