Well, probably the most dramatic case in the history of cryptocurrency seems to be headed to an end. According to the recent report that has been released, Ernst and Young (EY), the court-appointed monitor for the shuttered cryptocurrency exchange QuadrigaCX, has proposed moving the company from a restructuring process to bankruptcy proceedings.
E&Y believes the transition will streamline the administration of the proceedings
The fourth report of Monitor presented by Ernst and Young (EY) in QuadrigaCX case in the Supreme Court Of Nova Scotia has suggested the transition of the case from relief under the Companies’ Creditors Arrangement Act (CCAA) into proceedings under the Bankruptcy and Insolvency Act (BIA). According to EY
“Transitioning from the CCAA to the BIA will streamline the administration of the proceedings, reduce the level of professional involvement and provide enhanced investigative powers for the Trustee,”
In the report, EY mentions this proposed move was in consultation with Peter Wedlake, the Court-appointed Chief Restructuring Officer (the “CRO”), Representative Counsel and Stewart McKelvey in respect of possible alternative processes to administer the QuadrigaCX insolvency proceedings.
EY believes the proposed move will offer the following benefits
- A bankruptcy would allow for the potential sale of assets, including but not limited to Quadriga’s operating platform, should it be determined to be of value and if such a sale was determined to be feasible and beneficial;
- Governance issues would be addressed through the appointment of the Trustee for each of the Applicants thereby eliminating the need for the CRO or directors;
- Representative Counsel and the Official Committee could continue to participate in a bankruptcy process along with inspectors appointed at the first meeting of creditors (though the same individuals may fulfill both roles); and
- The Trustee will have additional investigatory powers without further relief from the Court that will be of assistance in the ongoing investigation of the business and affairs of the Applicants, including the right to compel production of documents and seek examination of relevant parties under oath.
Apart from all of these benefits, EY believes this process would be a more cost-effective option for administering the Applicants’ estates. EY also believes that this move would also be beneficial for Affected Users as it would streamline the whole process.
According to EY, its research into Quadriga’s missing funds might be nearing an end and a monitor, it plans to file a final report in the next few weeks, which would update the court on what progress it has made, through Tuesday’s filing did not provide any clarity on the exchange’s missing cryptos.
While the report does point that bankruptcy is the best way out for QuadrigaCX to end this mess, affected users will definitely wait for the final report to get more clarity on the missing cryptos.
Will the move Bankruptcy and Insolvency Act provide the much-needed relief to affected stakeholders of QuadringaCX? Do let us know your views on the same.