A new report published by Ernst and Young (EY) has recently shown that the embattled Canadian cryptocurrency exchange QuadrigaCX has $21 million in assets, but owes its creditors $160 million.
The report shows the firm’s assets and debts are spread between three subsidiaries associated with the cryptocurrency exchange, namely Quadriga Fintech Solutions, Whiteside Capital Corporation, and 0984750 B.C. The report revealed QuadrigaCX’s assets and liabilities as of April 12, 2019.
George Kinsman, the EY employee acting as the monitor and trustee in QuadrigaCX’s case, noted on the report that there’s “material discrepancy between the reported fiat and cryptocurrency obligations,” and that shoddy bookkeeping was an issued the firm faced.
Notably, QuadrigaCX is reportedly locked out of $145 million worth of cryptocurrency, as the unexpected passing of its founder and CEO Gerald Cotten saw the firm lose access to its cold storage wallets.
After initially filing for creditors protection, the exchange declared bankruptcy early last month, after receiving approval by Nova Scotia Supreme Court Justice Michael Wood. The bankruptcy was set to allow the firm to sell assets, “including but not limited to Quadriga’s operating platform.”
As covered, EY wasn’t able to locate any cryptocurrency in the Canadian trading platform’s cold wallets, which had been empty since April of 2018, having one of the addresses received an accidental transfer recently. The exchange, EY’s report claimed at the time, weren’t able to explain why the wallets hadn’t been used for months. Kinsman wrote in the report:
The applicants have been unable to identify a reason why Quadriga may have stopped using the identified bitcoin cold wallets for deposits in April 2018.
The monitor has reportedly managed to get a hold of about $500,000 worth of cryptocurrency recovered from QuadrigaCX’s hot wallets and “various other sources,” and now holds 61 BTC, 33 BCH, 2,661 BTG, 851 LTC, and 960 ETH.