By Canadian Press

Cryptocurrency exchange wins stay of proceedings in Halifax court

Feb 5, 2019 | 11:13 AM

HALIFAX — A Halifax judge says he will grant Canada’s largest cryptocurrency exchange protection from creditors as it deals with the fallout from its founder’s death.

Nova Scotia Supreme Court Justice Michael Wood today granted QuadrigaCX a 30-day stay of proceedings in a bid to stop any lawsuits from proceeding against the company at this point.

Maurice Chiasson, who is representing QuadrigaCX, told Wood the company needed time to find $250 million in missing cryptocurrency and cash.

QuadrigaCX filed for creditor protection on Jan. 31, and Wood confirmed today that he would grant that order.

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The Vancouver-based exchange owes $70 million in currency and an additional amount of cryptocurrency valued at approximately $180 million to roughly 115,000 users.

Court filings show that some have very large balances, with the largest affected user claim reportedly valued at approximately $70 million.

Lawyers for some of the 115,000 affected users were in the Halifax court.

Court documents show QuadrigaCX had been facing liquidity issues over the past year. CIBC froze roughly $25.7 million of its funds held in the account of a third-party processor in January 2018.

The company then lost its founder, CEO and sole director Gerald Cotten, who QuadrigaCX said died suddenly while travelling in India.

Court filings show that after his death, QuadrigaCX employees have been unable to locate or access the missing cryptocurrencies.

Employees tried to access the cryptocurrency within QuadrigaCX’s “cold” wallets, a system that stores cryptocurrencies offline to avoid hacking, such as on USB sticks or electronic hardware not connected to the internet.

The Canadian Press