Despite receiving $171 million worth of claims, Ernst & Young (EY), the court-appointed trustee of the defunct Canadian crypto exchange QuadrigaCX, is set to distribute about $30 million to its creditors, according to a new report.
Following the recently published report on the case, EY is seeking the Supreme Court of Justice’s approval to settle the Quadriga users’ crypto claims with the price of Bitcoin as at the date of the bankruptcy being April 15, 2019.
EY had revealed that as of September 11, 2020, they had received 17,053 claims from customers who had entrusted their funds with Quadriga. The total number of claims is 42,957. The trustee says it has only $30 million worth of funds available for repayment.
The proposal is quite unfair to creditors, considering that they had deposited their funds in Bitcoin when the unfortunate event occurred. The prices of the deposited cryptocurrencies, especially bitcoin had increased significantly. The creditors will be at a loss if they are to be settled at Bitcoin’s rate as at the said date being $6.7K per BTC.
The repayment date is still uncertain as the trustee is waiting for the court’s approval to decide the date to be used for the conversion rate.
Meanwhile, EY had previously proposed February 5, 2019, for claim settlement, being the time the court-appointed EY took charge of Quadriga’s case.
However, the trustee chose April 15, 2019, as they believed that Canada’s Bankruptcy and Insolvency Act (BIA) requires the conversion to happen using rates or prices as at the Date of Bankruptcy.
“Section 121 of the BIA provides that all debts and liabilities, present or future, to which the bankrupt is subject on the day on which the bankrupt becomes bankrupt would similarly support an exchange rate in respect of cryptocurrencies, consistent with the manner in which claims in foreign currencies (and securities) are valued,” EY quoted.
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