PRESS RELEASE: Ernst & Young Salvage $400,000 in assets from the QuadrigaCX Meltdown

PRESS RELEASE: Ernst & Young Salvage $400,000 in assets from the QuadrigaCX Meltdown
April 3, 2019
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A new report on the QuadrigaCX saga alleges to have recovered $400,000 in assets belonging to it. The QuadrigaCX exchange made headlines when it lost $190 million in customer funds after its CEO died abruptly. During the QuadrigaCX meltdown , many people lost their funds. The new report is a fourth in a series by court-appointed monitor Ernst & Young.

The Monitor proposes that bankruptcy is the preeminent way forward for the crypto exchange company. Last February, QuadrigaCX made headlines when they announced that their dead CEO was the only individual with access to $190 million in customer funds. Nonetheless, the latest evidence shows that the company faced financial challenges and most of the lost funds are simply lost.

Ernst & Young seem to confirm these massive losses except for the $400,000 that was discovered. The monitor adds that bankruptcy is the only sensible option as the company seems unsalvageable.

Pursuing bankruptcy will allow for the sale of company assets helping to claw back some of the ghosted funds. On the other hand, Ernst & Young may presume the role of a “super monitor” to give it more influence over the next stage of the process.

Asset Recovery

In the process of compiling their report, the monitors investigated QuadrigaCX’s payment processors. They also sent queries to other businesses that were in contact with the exchange before its collapse. Some were much willing to cooperate while others were hesitant.

The report revealed that POSConnect acknowledged that it owes QuadrigaCX $300,000. Nonetheless, the money will remain inaccessible until April 28, 2019. According to the monitor, VoPay Money-transfer Company possesses $116,000 of the missing funds. But, the report revealed that VoPay refused to pay until it is granted insurance from liability. Ernst & Young is not ready to grant indemnity.

The monitor plans to exert more pressure on VoPay to release the funds. WB21 digital bank, rebranded as Black Banx, held QuadrigaCX’s money in 2017. However, it could not establish the owner of the money.

Reports show that WB21 has approximately $9 million of the missing QuadrigaCX funds. Nonetheless, the latest Ernst & Young report has WB21 claiming that they owe QuadrigaCX only $14. The report added that the digital bank was uncooperative. In that connection, Ernst & Young has requested assistance from the court to access WB21 documents.

The monitor also added that it believes that an additional $21,000 or $36,000 may be held by Alto .

Restrictions on Cotten’s Widow

This report also suggests that the QuadrigaCX funds may have acquired assets outside of the exchange. Allegedly, corporate and personal restrictions between the exchange’s founder Gerald Cotten and his widow, Jennifer Robertson, never existed formally. Due to that, Ernst & Young suggested that a comprehensive asset preservation order is placed on all appropriate assets. That would stop them from being sold.

The preservation order will cover everything owned by Jennifer Robertson and the Cotten Estate. Also, all assets owned by other enterprises that belong to Cotten and Robertson are affected. They include Robertson Nova Consulting Inc., the Seaglass Trust, and Robertson Nova Property.

The monitor will publish a final report on the matter. But, from the many unaddressed questions, that probably will not be enough.

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