Controversial Exchange, QuadrigaCX's Users Still Unable to Withdraw Funds

  • Troubled exchange, QuadrigaCX's users still unable to withdraw funds.
  • Canadian exchange is working with local banks to help start "slow" withdrawal process.

Canadian cryptoasset exchange, QuadrigaCX is reportedly working on a backlog of withdrawal requests from clients who claim they are unable to get their money back.

QuadrigCX's CEO Reportedly Passed Away

As CryptoGlobe reported in mid-November 2018, Canada, Ontario's Superior Court of Justice had taken over custody and liability of nearly $20 million worth of funds that were being held by QuadrigaCX’s management. The controversial exchange had reportedly been banking with the Canadian Imperial Bank of Commerce (CIBC), and the institution had frozen QuadrigaCX's funds as it was unable to verify the identities of the owner(s) of its accounts.

On Monday (January 14th), QuadrigaCX’s support team announced that Gerald Cotten, the CEO and founder of the troubled crypto exchange, had passed away a month back. Cotten’s wife, Jennifer Robertson, confirmed that Cotten died last year on December 9th after suffering from complications related to Crohn’s disease.

On Tuesday, QuadrigaCX’s management staff informed the exchange’s customers through an email that the company was working on processing withdrawal requests “slowly” and that it was also “actively working on having the funds deposited and distributed.” Aaron Matthews, QuadrigaCX’s interim president and CEO, wrote in the email (shared with Coindesk): 

While we don’t have a specific update pertaining to this situation, our goal was to resolve this issue within the next two weeks and we remain committed to that goal.

Lack Of Proper Communication

Xitong Zou, a Canadian resident and QuadrigaCX user, told Coindesk that he had contacted the exchange’s management several times, in order to withdraw his funds from the trading platform.

Zou also claims he was repeatedly told withdrawals might take a few more weeks. He added: 

If only the [QuadrigaCX] customer support were better I think it could go a long way, and it’s not like they aren’t active. I see them on Reddit and Facebook and Twitter answering minor questions about cash pickup times etc., but they don’t answer any of the big questions we have regarding the CEO’s recent death.

Going on express his frustration with the matter, Zou further noted: “The fact that it happened a month ago (CEO’s death), and they just announced it now, and no proof of death, no obituary, no linkedin profiles of any of the staff, no physical addresses, limited crypto withdrawal limits, etc all makes people suspicious.”

Due to the lack of proper and timely communication from QuadrigaCX’s management team, many of the exchange’s customers are now concerned that they might not be able to withdraw their funds from the exchange, Zou said.

Canada's Courts Release Funds

A representative at Global Affairs Canada (a government agency that manages the nation’s diplomatic and consular relations) appeared to have confirmed reports of Cotten’s death while on his trip to India. However, the agency did not state Cotten’s name or specify the date on which the QuadrigaCX CEO passed away.

As mentioned, the Ontario Superior Court of Justice had taken custody of the exchange’s funds last year. But only a few weeks later, Judge Glenn Hainey (who was handling the matter) reportedly decided to release the funds (appr. $20 million) back to QuadrigaCX’s management.

Before being transferred to the exchange’s accounts, the funds were held by the Bank of Montreal (according to QuadrigaCX). The trading platform’s management also said that Billerfly, a payment processor, needed to endorse the bank drafts. This, QuadrigaCX’s support team claimed was required before withdrawals could be processed.

Hard To Find "Crypto-Friendly" Banks

José Reyes, the managing director at Billerfly, stated that the company was having a hard time finding “crypto-friendly banks” that would be willing to clear the transactions.

Commenting on why certain users may have experienced problems while withdrawing their funds, Matthews, the interim president at QuadrigaCX, said pending withdrawals had been “canceled back to [users’] account.” He added that there were currently certain limits imposed on the amount of funds users can withdraw at one time.

The exchange’s management has also said it would work with several other banks in order to make sure financial institutions cannot freeze funds like the CIBC did.

At present, unverified users can reportedly withdraw between $5,000 to $10,000 in digital currency. “Level 1 verified” customers can take out as much as $25,000 per transaction, according to Matthews.