Canadian banks have recently revealed they’re hesitant when it comes to handles QuadrigACX’s assets, over concerns they may have been involved in money laundering.
According to a report published by local news outlet CBC, the country’s big banks showed they’re skeptic of the crypto industry when a Nova Scotia judge ordered the eventual disbursement of over $22.8 million that belong to the exchange.
Per the report, lawyers representing the court-appointed monitor Ernst & Young (EY) and the Bank of Montreal, revealed the banks were uncomfortable handling money from a cryptocurrency exchange, as the “uncertain origin of the funds raises concerns about possible money laundering.”
Elizabeth Pillon, a lawyer representing the ‘big four’ auditor EY, revealed the banks were in “uncharted territory,” and said she doesn’t “blame them for hesitating” as the banks raised 2money-laundering issues.” Pillon added:
We don't have the source-of-funds information that the banks are looking for. The monitor has serious concerns about finding another institution to hold these funds
Justice Michael Wood issued an order that will see QuadrigaCX’s money be deposited in a Royal Bank account, which will then be used to pay for ongoing court proceedings.
QuadrigaCX’s Millions Locked Away
Notably, the money could also be used to partially compensate some of the cryptocurrency exchange’s 115,000 users, to which it owes about $145 million worth of cryptocurrencies that it no longer has access to, as well as another $45 million in cash it relied on third-party payment processors to handle.
QuadrigaCX stopped being able to access its millions worth of crypto after its CEO Gerald Cotten unexpectedly passed away in December of last year in India. Cotten was reportedly the only person with access to the crypto held in cold storage.
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— QuadrigaCX (@QuadrigaCoinEx) January 14, 2019
His widow, Jennifer Robertson, has revealed initial attempts to get to the funds failed, and soon after saw the exchange file for creditor protection while it figured out its situation. It was granted creditor protection earlier this month.
Notably, QuadrigaCX was already struggling to get a bank account before its CEO passed away. As such, it turned to third-party payment processors to handle its accounts. Per the CBC, the Royal Bank “expressed hesitation” when dealing with the funds without “direction and relief” from the court.
Along with the Bank of Montreal, it included clauses aimed at limiting its liability while carrying out its duties, agreeing to transfer the funds. The crypto exchange’s situation has already cost a trader his $420,000 life savings.