Crypto exchange Quadriga CX’s funds taken over by Canadian court
QuadrigaCX, a Canada-based cryptocurrency exchange, had its funds worth C$26 million seized by a court over a banking dispute, according to a court order from the Ontario Superior Court of Justice.
The decision was taken by Judge Glenn Hainey of the aforementioned court, which granted the Canadian Imperial Bank of Commerce (CIBC), one of the Big Five Banks of Canada, control over the exchange’s funds until the relevant owner(s) is determined. The liability of the funds will, at present, be maintained by the bank.
Judge Hainey specified that the order was an ‘interpleader order,’ which occurs when two or more parties claim ownership of the funds in question. The funds are put on hold by the court until the rightful owner is determined.
The dispute, hence, lies with who the owner of the C$26 million and $69,000 is. The parties in question are the crypto exchange QuadrigaCX and its payment processor Costodian.
The two parties met at court on November 9 to settle the matter. However, Judge Hainey determined that the parties could not agree on who the actual owner of the funds was and so, he released the interpleader offer this week.
CIBC has frozen the funds in question and the same has not been ruled as ‘wrongful’ by the judge at the time.
QuadrigaCX’s customers can apply for their respective funds to be released by the court. However, in order to do so, they will have to reveal their identities. This could lead to potentially negative tax consequences.
The banking freeze has not taken too much of a toll on the exchange, with less than one percent of its customers affected by the court’s decision. The dispute should end before the holiday season, before trading activity ramps up.
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