Business ProfileforQuadrigaCX
Currency Exchange
Current Alerts For This Business
Alert:
On February 19, 2019, the Court appointed Miller Tomson / Cox & Palmer as Representative Counsel for affected users in respect of the Quadriga CCAA proceedings. Representative Counsel can be contacted via email at: quadrigacx@millerthomson.com.
Bankruptcy:
On 04/11/2019, the business filed a Notice of Intention to Make a Proposal (subsection 50.4(1) of the Bankruptcy and Insolvency Act. Those with monetary claims against the company are advised to obtain a Proof of Claim form by writing to the following trustee: Ernst & Young LLP, 500 1871 Hollis St, Halifax, NS, B3J 0C3.
Additional business information
Additional Info:
In December of 2018 BBB began an investigation into the business practices of QuadrigaCX. This investigation was prompted by the number complaints alleging that their currency exchanges from virtual currency to Canadian Dollars were not being completed in the advertised time frame.
Our investigation uncovered a lawsuit ( click here ) which disclosed that approximately 26 million dollars were frozen by the financial institution where the accounts were held. This suit also states that these funds were traced to transactions by 388 Depositors. On November 9, 2018 the frozen funds were ordered to be deposited with courts for determination as to entitlement of the disputed funds.
Some of the transactional behaviour described in the suit is not typical of currency exchange. The suit indicates that a third party processor used a personal bank account to deposit money that was intended to fund currency exchanges on behalf of QuadrigaCX and QuadrigaCX clients.
Currency exchange in Canada is regulated. Currency exchange transactions are required to proceed through bank accounts that are associated with Financial Institutions or Money Service Businesses rather than personal accounts. Financial Institutions & Money Service Businesses are regulated business types, with legal reporting requirements. Money Service Businesses are required to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
At this time in Canada, virtual currency (aka crypto currency) exchanges are not required to register as a Money Service Business. BBB verified this on December 5, 2018 with FINTRAC.
When an individual purchases crypto currency with QuadrigaCX they are engaging in currency exchange. The purchase of currency is currency exchange. Purchasing Bitcoin (BTC) with Canadian Dollars (CAD) is changing one currency to another.
According to the QuadrigaCX website, a person first purchases QuadrigaCX bucks, those QuadrigaCX bucks are then used to purchase the desired currency. Typical transactions are CAD or USD used to purchase QuadrigaCX bucks, which is then used to purchase the crypto currency of choice, and the reverse.
QuadrigaCX bucks may not have value outside of the QuadrigaCX platform. This means that if QuadrigaCX ceases operations it may not be possible to redeem the value of those QuadrigaCX bucks.
QuadrigaCX does not provide information on what happens to QuadrigaCX bucks during transactions that have not completed.
On December 10, 2018 BBB sent an email to contact@quadrigacx.com requesting information relating to the information discovered during the course of our investigation. As of January 7, 2019 BBB has not received a response.
These were the questions asked by BBB:
1. Does QuadrigaCX have a storefront? If yes, what is that address?
2. If a client has an issue to what address should they send any legal correspondence?
3. Who is your current payment processor(s), are they operating from a fully transparent business account?
4. A Financial Institution froze ~ 26 million of client funds in an account in 2018, these were recently ordered to be released, why have there been delays in the transfer of funds to other clients?
5. Complaints to BBB indicates that delays well beyond the stated deposit time-frames have occurred with no explanation to those clients. Can you clarify why the delays occurred?
6. Where does QuadrigaCX disclose what happens to QuadrigaCX Bucks if QuadrigaCX closes or ceases operations. These are purchased by clients to fund purchases of other currencies. If they remain in an account because of processing delays or business or account closure how are clients refunded? Are they refunded the original purchase price of the QuadrigaCX Bucks or the market value, and in which currency, fiat or crypto?
Should BBB receive a response the business review will be updated with a summary of the information received.
On February 5, 2019 QuadrigaCX was granted a 30 day stay under the Companies' Creditors Arrangement Act (CCAA). Ernst & Young Inc. have been appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.comand. Public materials filed in relation to the CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga
On January 31, 2019 QuadrigaCX declared that they have made an application for creditor protection.
Clients who believe they are owned money may find the information contained on the Office of the Superintendent of Bankruptcy of Canada's website about the Companies' Creditors Arrangement Act (CCAA) useful. That information can be read at
https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html
The following is the statement posted on QuadrigaCX's website, https://www.quadrigacx.com/
February 5, 2019
Dear Customers,
Today an order for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was issued to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.
We did not enter into this decision lightly. For the past weeks, we have worked extensively to address our liquidity issues, which include locating our very significant cryptocurrency reserves held in cold wallets required to satisfy customer cryptocurrency balances on deposit and sourcing a financial institution to accept the bank drafts being transferred to us. Unfortunately, these efforts have not been successful. Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.
With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company.
We are sure you have many questions. We are in the early stages of a long process and we do not have all the answers right now. What we can tell you is that the CCAA process will allow QuadrigaCX to keep all options open to attempt to maximize the funds available for the company's stakeholders. We will provide further updates to the extent possible.
Included below is a Q&A, which we hope will address some of the questions you may have at this time.
QuadrigaCX values and appreciates all of its customers and its employees. We thank you for your support and understanding during this challenging time.
A copy of the Oder issued by the Supreme Court of Nova Scotia on February 5, 2019 may be found here (https://www.quadrigacx.com/assets/Quadriga_Order.pdf)
Q&A
Q: What does it mean to file for creditor protection?
A: Filing for creditor protection occurs when a business needs time to figure out how it will meet its debt obligations.
Q: Why are you filing for creditor protection?
A: Once it was apparent that we could not access the significant cryptocurrency reserves held in the cold wallets required to satisfy customer cryptocurrency balances on deposit, nor obtain the funds to settle customer currency withdrawal requests, we made the tough but necessary decision to file for creditor protection.
Q: Is there a chance that a solution can be reached to settle customer withdrawals?
A: Over the past weeks we have worked extensively to address our liquidity issues. As such, we are operating under the assumption that a solution will not be reached in the near term, which is why we have filed for creditor protection.
Q: How long will the protection remain in place?
A: Creditor protection is in place for 30-days, with the option to extend.
Q: Why can't you access the coins in the cold wallets?
A: Cold wallets, by their nature, are highly encrypted and were kept off the QuadrigaCX server for security reasons. Gerry took sole responsibility for the handling of funds for QuadrigaCX and as such no one other than him can access the coins in the cold wallets
Q: What steps have you taken to access the coins in the cold wallets?
A: We have hired outside consultants to access these cold wallets. To date, we have accessed a few coins, but not many. Work on that front is ongoing.
Q: Will you opt to extend creditor protection?
A: Our focus right now is the initial 30-days and determining a plan for how to deal with our customer obligations.
Q: Why go through this process when you can just file for bankruptcy?
A: Creditor protection was necessary to protect the interests of our customers. We are exploring a number of options to settle our customer obligations.
Q: Will the website ever be back online?
A: We have taken the website offline while QuadrigaCX is in the CCAA process. It is expected that all account balances on the platform existing as of the date of filing will be dealt with through the CCAA process. Together with the Monitor, the company will determine if it is feasible to restart the website and will seek the court's authorization to do so if appropriate at a later date.
Q: Can I still access my trading history and account information even though the website is inactive?
A: Each customer's trade history will be preserved.
Q: Who can I contact with regards to the status of QuadrigaCX's CCAA process or make a comment?
A: Ernst & Young is appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.com
Q: Will you provide a further update?
A: We will provide updates to the extent possible. Public materials filed in relation to our CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga On February 19, 2019, the Court appointed Miller Tomson / Cox & Palmer as Representative Counsel for affected users in respect of the Quadriga CCAA proceedings. Representative Counsel can be contacted via email at: quadrigacx@millerthomson.com.
Our investigation uncovered a lawsuit ( click here ) which disclosed that approximately 26 million dollars were frozen by the financial institution where the accounts were held. This suit also states that these funds were traced to transactions by 388 Depositors. On November 9, 2018 the frozen funds were ordered to be deposited with courts for determination as to entitlement of the disputed funds.
Some of the transactional behaviour described in the suit is not typical of currency exchange. The suit indicates that a third party processor used a personal bank account to deposit money that was intended to fund currency exchanges on behalf of QuadrigaCX and QuadrigaCX clients.
Currency exchange in Canada is regulated. Currency exchange transactions are required to proceed through bank accounts that are associated with Financial Institutions or Money Service Businesses rather than personal accounts. Financial Institutions & Money Service Businesses are regulated business types, with legal reporting requirements. Money Service Businesses are required to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
At this time in Canada, virtual currency (aka crypto currency) exchanges are not required to register as a Money Service Business. BBB verified this on December 5, 2018 with FINTRAC.
When an individual purchases crypto currency with QuadrigaCX they are engaging in currency exchange. The purchase of currency is currency exchange. Purchasing Bitcoin (BTC) with Canadian Dollars (CAD) is changing one currency to another.
According to the QuadrigaCX website, a person first purchases QuadrigaCX bucks, those QuadrigaCX bucks are then used to purchase the desired currency. Typical transactions are CAD or USD used to purchase QuadrigaCX bucks, which is then used to purchase the crypto currency of choice, and the reverse.
QuadrigaCX bucks may not have value outside of the QuadrigaCX platform. This means that if QuadrigaCX ceases operations it may not be possible to redeem the value of those QuadrigaCX bucks.
QuadrigaCX does not provide information on what happens to QuadrigaCX bucks during transactions that have not completed.
On December 10, 2018 BBB sent an email to contact@quadrigacx.com requesting information relating to the information discovered during the course of our investigation. As of January 7, 2019 BBB has not received a response.
These were the questions asked by BBB:
1. Does QuadrigaCX have a storefront? If yes, what is that address?
2. If a client has an issue to what address should they send any legal correspondence?
3. Who is your current payment processor(s), are they operating from a fully transparent business account?
4. A Financial Institution froze ~ 26 million of client funds in an account in 2018, these were recently ordered to be released, why have there been delays in the transfer of funds to other clients?
5. Complaints to BBB indicates that delays well beyond the stated deposit time-frames have occurred with no explanation to those clients. Can you clarify why the delays occurred?
6. Where does QuadrigaCX disclose what happens to QuadrigaCX Bucks if QuadrigaCX closes or ceases operations. These are purchased by clients to fund purchases of other currencies. If they remain in an account because of processing delays or business or account closure how are clients refunded? Are they refunded the original purchase price of the QuadrigaCX Bucks or the market value, and in which currency, fiat or crypto?
Should BBB receive a response the business review will be updated with a summary of the information received.
On February 5, 2019 QuadrigaCX was granted a 30 day stay under the Companies' Creditors Arrangement Act (CCAA). Ernst & Young Inc. have been appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.comand. Public materials filed in relation to the CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga
On January 31, 2019 QuadrigaCX declared that they have made an application for creditor protection.
Clients who believe they are owned money may find the information contained on the Office of the Superintendent of Bankruptcy of Canada's website about the Companies' Creditors Arrangement Act (CCAA) useful. That information can be read at
https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html
The following is the statement posted on QuadrigaCX's website, https://www.quadrigacx.com/
February 5, 2019
Dear Customers,
Today an order for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was issued to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.
We did not enter into this decision lightly. For the past weeks, we have worked extensively to address our liquidity issues, which include locating our very significant cryptocurrency reserves held in cold wallets required to satisfy customer cryptocurrency balances on deposit and sourcing a financial institution to accept the bank drafts being transferred to us. Unfortunately, these efforts have not been successful. Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.
With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company.
We are sure you have many questions. We are in the early stages of a long process and we do not have all the answers right now. What we can tell you is that the CCAA process will allow QuadrigaCX to keep all options open to attempt to maximize the funds available for the company's stakeholders. We will provide further updates to the extent possible.
Included below is a Q&A, which we hope will address some of the questions you may have at this time.
QuadrigaCX values and appreciates all of its customers and its employees. We thank you for your support and understanding during this challenging time.
A copy of the Oder issued by the Supreme Court of Nova Scotia on February 5, 2019 may be found here (https://www.quadrigacx.com/assets/Quadriga_Order.pdf)
Q&A
Q: What does it mean to file for creditor protection?
A: Filing for creditor protection occurs when a business needs time to figure out how it will meet its debt obligations.
Q: Why are you filing for creditor protection?
A: Once it was apparent that we could not access the significant cryptocurrency reserves held in the cold wallets required to satisfy customer cryptocurrency balances on deposit, nor obtain the funds to settle customer currency withdrawal requests, we made the tough but necessary decision to file for creditor protection.
Q: Is there a chance that a solution can be reached to settle customer withdrawals?
A: Over the past weeks we have worked extensively to address our liquidity issues. As such, we are operating under the assumption that a solution will not be reached in the near term, which is why we have filed for creditor protection.
Q: How long will the protection remain in place?
A: Creditor protection is in place for 30-days, with the option to extend.
Q: Why can't you access the coins in the cold wallets?
A: Cold wallets, by their nature, are highly encrypted and were kept off the QuadrigaCX server for security reasons. Gerry took sole responsibility for the handling of funds for QuadrigaCX and as such no one other than him can access the coins in the cold wallets
Q: What steps have you taken to access the coins in the cold wallets?
A: We have hired outside consultants to access these cold wallets. To date, we have accessed a few coins, but not many. Work on that front is ongoing.
Q: Will you opt to extend creditor protection?
A: Our focus right now is the initial 30-days and determining a plan for how to deal with our customer obligations.
Q: Why go through this process when you can just file for bankruptcy?
A: Creditor protection was necessary to protect the interests of our customers. We are exploring a number of options to settle our customer obligations.
Q: Will the website ever be back online?
A: We have taken the website offline while QuadrigaCX is in the CCAA process. It is expected that all account balances on the platform existing as of the date of filing will be dealt with through the CCAA process. Together with the Monitor, the company will determine if it is feasible to restart the website and will seek the court's authorization to do so if appropriate at a later date.
Q: Can I still access my trading history and account information even though the website is inactive?
A: Each customer's trade history will be preserved.
Q: Who can I contact with regards to the status of QuadrigaCX's CCAA process or make a comment?
A: Ernst & Young is appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.com
Q: Will you provide a further update?
A: We will provide updates to the extent possible. Public materials filed in relation to our CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga On February 19, 2019, the Court appointed Miller Tomson / Cox & Palmer as Representative Counsel for affected users in respect of the Quadriga CCAA proceedings. Representative Counsel can be contacted via email at: quadrigacx@millerthomson.com.
Additional Info:
In December of 2018 BBB began an investigation into the business practices of QuadrigaCX. This investigation was prompted by the number complaints alleging that their currency exchanges from virtual currency to Canadian Dollars were not being completed in the advertised time frame.
Our investigation uncovered a lawsuit ( click here ) which disclosed that approximately 26 million dollars were frozen by the financial institution where the accounts were held. This suit also states that these funds were traced to transactions by 388 Depositors. On November 9, 2018 the frozen funds were ordered to be deposited with courts for determination as to entitlement of the disputed funds.
Some of the transactional behaviour described in the suit is not typical of currency exchange. The suit indicates that a third party processor used a personal bank account to deposit money that was intended to fund currency exchanges on behalf of QuadrigaCX and QuadrigaCX clients.
Currency exchange in Canada is regulated. Currency exchange transactions are required to proceed through bank accounts that are associated with Financial Institutions or Money Service Businesses rather than personal accounts. Financial Institutions & Money Service Businesses are regulated business types, with legal reporting requirements. Money Service Businesses are required to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
At this time in Canada, virtual currency (aka crypto currency) exchanges are not required to register as a Money Service Business. BBB verified this on December 5, 2018 with FINTRAC.
When an individual purchases crypto currency with QuadrigaCX they are engaging in currency exchange. The purchase of currency is currency exchange. Purchasing Bitcoin (BTC) with Canadian Dollars (CAD) is changing one currency to another.
According to the QuadrigaCX website, a person first purchases QuadrigaCX bucks, those QuadrigaCX bucks are then used to purchase the desired currency. Typical transactions are CAD or USD used to purchase QuadrigaCX bucks, which is then used to purchase the crypto currency of choice, and the reverse.
QuadrigaCX bucks may not have value outside of the QuadrigaCX platform. This means that if QuadrigaCX ceases operations it may not be possible to redeem the value of those QuadrigaCX bucks.
QuadrigaCX does not provide information on what happens to QuadrigaCX bucks during transactions that have not completed.
On December 10, 2018 BBB sent an email to contact@quadrigacx.com requesting information relating to the information discovered during the course of our investigation. As of January 7, 2019 BBB has not received a response.
These were the questions asked by BBB:
1. Does QuadrigaCX have a storefront? If yes, what is that address?
2. If a client has an issue to what address should they send any legal correspondence?
3. Who is your current payment processor(s), are they operating from a fully transparent business account?
4. A Financial Institution froze ~ 26 million of client funds in an account in 2018, these were recently ordered to be released, why have there been delays in the transfer of funds to other clients?
5. Complaints to BBB indicates that delays well beyond the stated deposit time-frames have occurred with no explanation to those clients. Can you clarify why the delays occurred?
6. Where does QuadrigaCX disclose what happens to QuadrigaCX Bucks if QuadrigaCX closes or ceases operations. These are purchased by clients to fund purchases of other currencies. If they remain in an account because of processing delays or business or account closure how are clients refunded? Are they refunded the original purchase price of the QuadrigaCX Bucks or the market value, and in which currency, fiat or crypto?
Should BBB receive a response the business review will be updated with a summary of the information received.
On February 5, 2019 QuadrigaCX was granted a 30 day stay under the Companies' Creditors Arrangement Act (CCAA). Ernst & Young Inc. have been appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.comand. Public materials filed in relation to the CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga
On January 31, 2019 QuadrigaCX declared that they have made an application for creditor protection.
Clients who believe they are owned money may find the information contained on the Office of the Superintendent of Bankruptcy of Canada's website about the Companies' Creditors Arrangement Act (CCAA) useful. That information can be read at
https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html
The following is the statement posted on QuadrigaCX's website, https://www.quadrigacx.com/
February 5, 2019
Dear Customers,
Today an order for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was issued to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.
We did not enter into this decision lightly. For the past weeks, we have worked extensively to address our liquidity issues, which include locating our very significant cryptocurrency reserves held in cold wallets required to satisfy customer cryptocurrency balances on deposit and sourcing a financial institution to accept the bank drafts being transferred to us. Unfortunately, these efforts have not been successful. Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.
With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company.
We are sure you have many questions. We are in the early stages of a long process and we do not have all the answers right now. What we can tell you is that the CCAA process will allow QuadrigaCX to keep all options open to attempt to maximize the funds available for the company's stakeholders. We will provide further updates to the extent possible.
Included below is a Q&A, which we hope will address some of the questions you may have at this time.
QuadrigaCX values and appreciates all of its customers and its employees. We thank you for your support and understanding during this challenging time.
A copy of the Oder issued by the Supreme Court of Nova Scotia on February 5, 2019 may be found here (https://www.quadrigacx.com/assets/Quadriga_Order.pdf)
Q&A
Q: What does it mean to file for creditor protection?
A: Filing for creditor protection occurs when a business needs time to figure out how it will meet its debt obligations.
Q: Why are you filing for creditor protection?
A: Once it was apparent that we could not access the significant cryptocurrency reserves held in the cold wallets required to satisfy customer cryptocurrency balances on deposit, nor obtain the funds to settle customer currency withdrawal requests, we made the tough but necessary decision to file for creditor protection.
Q: Is there a chance that a solution can be reached to settle customer withdrawals?
A: Over the past weeks we have worked extensively to address our liquidity issues. As such, we are operating under the assumption that a solution will not be reached in the near term, which is why we have filed for creditor protection.
Q: How long will the protection remain in place?
A: Creditor protection is in place for 30-days, with the option to extend.
Q: Why can't you access the coins in the cold wallets?
A: Cold wallets, by their nature, are highly encrypted and were kept off the QuadrigaCX server for security reasons. Gerry took sole responsibility for the handling of funds for QuadrigaCX and as such no one other than him can access the coins in the cold wallets
Q: What steps have you taken to access the coins in the cold wallets?
A: We have hired outside consultants to access these cold wallets. To date, we have accessed a few coins, but not many. Work on that front is ongoing.
Q: Will you opt to extend creditor protection?
A: Our focus right now is the initial 30-days and determining a plan for how to deal with our customer obligations.
Q: Why go through this process when you can just file for bankruptcy?
A: Creditor protection was necessary to protect the interests of our customers. We are exploring a number of options to settle our customer obligations.
Q: Will the website ever be back online?
A: We have taken the website offline while QuadrigaCX is in the CCAA process. It is expected that all account balances on the platform existing as of the date of filing will be dealt with through the CCAA process. Together with the Monitor, the company will determine if it is feasible to restart the website and will seek the court's authorization to do so if appropriate at a later date.
Q: Can I still access my trading history and account information even though the website is inactive?
A: Each customer's trade history will be preserved.
Q: Who can I contact with regards to the status of QuadrigaCX's CCAA process or make a comment?
A: Ernst & Young is appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.com
Q: Will you provide a further update?
A: We will provide updates to the extent possible. Public materials filed in relation to our CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga On February 19, 2019, the Court appointed Miller Tomson / Cox & Palmer as Representative Counsel for affected users in respect of the Quadriga CCAA proceedings. Representative Counsel can be contacted via email at: quadrigacx@millerthomson.com.
Our investigation uncovered a lawsuit ( click here ) which disclosed that approximately 26 million dollars were frozen by the financial institution where the accounts were held. This suit also states that these funds were traced to transactions by 388 Depositors. On November 9, 2018 the frozen funds were ordered to be deposited with courts for determination as to entitlement of the disputed funds.
Some of the transactional behaviour described in the suit is not typical of currency exchange. The suit indicates that a third party processor used a personal bank account to deposit money that was intended to fund currency exchanges on behalf of QuadrigaCX and QuadrigaCX clients.
Currency exchange in Canada is regulated. Currency exchange transactions are required to proceed through bank accounts that are associated with Financial Institutions or Money Service Businesses rather than personal accounts. Financial Institutions & Money Service Businesses are regulated business types, with legal reporting requirements. Money Service Businesses are required to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
At this time in Canada, virtual currency (aka crypto currency) exchanges are not required to register as a Money Service Business. BBB verified this on December 5, 2018 with FINTRAC.
When an individual purchases crypto currency with QuadrigaCX they are engaging in currency exchange. The purchase of currency is currency exchange. Purchasing Bitcoin (BTC) with Canadian Dollars (CAD) is changing one currency to another.
According to the QuadrigaCX website, a person first purchases QuadrigaCX bucks, those QuadrigaCX bucks are then used to purchase the desired currency. Typical transactions are CAD or USD used to purchase QuadrigaCX bucks, which is then used to purchase the crypto currency of choice, and the reverse.
QuadrigaCX bucks may not have value outside of the QuadrigaCX platform. This means that if QuadrigaCX ceases operations it may not be possible to redeem the value of those QuadrigaCX bucks.
QuadrigaCX does not provide information on what happens to QuadrigaCX bucks during transactions that have not completed.
On December 10, 2018 BBB sent an email to contact@quadrigacx.com requesting information relating to the information discovered during the course of our investigation. As of January 7, 2019 BBB has not received a response.
These were the questions asked by BBB:
1. Does QuadrigaCX have a storefront? If yes, what is that address?
2. If a client has an issue to what address should they send any legal correspondence?
3. Who is your current payment processor(s), are they operating from a fully transparent business account?
4. A Financial Institution froze ~ 26 million of client funds in an account in 2018, these were recently ordered to be released, why have there been delays in the transfer of funds to other clients?
5. Complaints to BBB indicates that delays well beyond the stated deposit time-frames have occurred with no explanation to those clients. Can you clarify why the delays occurred?
6. Where does QuadrigaCX disclose what happens to QuadrigaCX Bucks if QuadrigaCX closes or ceases operations. These are purchased by clients to fund purchases of other currencies. If they remain in an account because of processing delays or business or account closure how are clients refunded? Are they refunded the original purchase price of the QuadrigaCX Bucks or the market value, and in which currency, fiat or crypto?
Should BBB receive a response the business review will be updated with a summary of the information received.
On February 5, 2019 QuadrigaCX was granted a 30 day stay under the Companies' Creditors Arrangement Act (CCAA). Ernst & Young Inc. have been appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.comand. Public materials filed in relation to the CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga
On January 31, 2019 QuadrigaCX declared that they have made an application for creditor protection.
Clients who believe they are owned money may find the information contained on the Office of the Superintendent of Bankruptcy of Canada's website about the Companies' Creditors Arrangement Act (CCAA) useful. That information can be read at
https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html
The following is the statement posted on QuadrigaCX's website, https://www.quadrigacx.com/
February 5, 2019
Dear Customers,
Today an order for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was issued to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.
We did not enter into this decision lightly. For the past weeks, we have worked extensively to address our liquidity issues, which include locating our very significant cryptocurrency reserves held in cold wallets required to satisfy customer cryptocurrency balances on deposit and sourcing a financial institution to accept the bank drafts being transferred to us. Unfortunately, these efforts have not been successful. Since we were unable to resolve these issues in a timely fashion, we did not want trading to continue on our platform. We filed for creditor protection to help resolve these matters and preserve the interests of our customers.
With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company.
We are sure you have many questions. We are in the early stages of a long process and we do not have all the answers right now. What we can tell you is that the CCAA process will allow QuadrigaCX to keep all options open to attempt to maximize the funds available for the company's stakeholders. We will provide further updates to the extent possible.
Included below is a Q&A, which we hope will address some of the questions you may have at this time.
QuadrigaCX values and appreciates all of its customers and its employees. We thank you for your support and understanding during this challenging time.
A copy of the Oder issued by the Supreme Court of Nova Scotia on February 5, 2019 may be found here (https://www.quadrigacx.com/assets/Quadriga_Order.pdf)
Q&A
Q: What does it mean to file for creditor protection?
A: Filing for creditor protection occurs when a business needs time to figure out how it will meet its debt obligations.
Q: Why are you filing for creditor protection?
A: Once it was apparent that we could not access the significant cryptocurrency reserves held in the cold wallets required to satisfy customer cryptocurrency balances on deposit, nor obtain the funds to settle customer currency withdrawal requests, we made the tough but necessary decision to file for creditor protection.
Q: Is there a chance that a solution can be reached to settle customer withdrawals?
A: Over the past weeks we have worked extensively to address our liquidity issues. As such, we are operating under the assumption that a solution will not be reached in the near term, which is why we have filed for creditor protection.
Q: How long will the protection remain in place?
A: Creditor protection is in place for 30-days, with the option to extend.
Q: Why can't you access the coins in the cold wallets?
A: Cold wallets, by their nature, are highly encrypted and were kept off the QuadrigaCX server for security reasons. Gerry took sole responsibility for the handling of funds for QuadrigaCX and as such no one other than him can access the coins in the cold wallets
Q: What steps have you taken to access the coins in the cold wallets?
A: We have hired outside consultants to access these cold wallets. To date, we have accessed a few coins, but not many. Work on that front is ongoing.
Q: Will you opt to extend creditor protection?
A: Our focus right now is the initial 30-days and determining a plan for how to deal with our customer obligations.
Q: Why go through this process when you can just file for bankruptcy?
A: Creditor protection was necessary to protect the interests of our customers. We are exploring a number of options to settle our customer obligations.
Q: Will the website ever be back online?
A: We have taken the website offline while QuadrigaCX is in the CCAA process. It is expected that all account balances on the platform existing as of the date of filing will be dealt with through the CCAA process. Together with the Monitor, the company will determine if it is feasible to restart the website and will seek the court's authorization to do so if appropriate at a later date.
Q: Can I still access my trading history and account information even though the website is inactive?
A: Each customer's trade history will be preserved.
Q: Who can I contact with regards to the status of QuadrigaCX's CCAA process or make a comment?
A: Ernst & Young is appointed by the Court as an independent third party to monitor the proceedings and can be contacted at quadriga.monitor@ca.ey.com
Q: Will you provide a further update?
A: We will provide updates to the extent possible. Public materials filed in relation to our CCAA administration will be available via the Monitor's website at www.ey.com/ca/quadriga On February 19, 2019, the Court appointed Miller Tomson / Cox & Palmer as Representative Counsel for affected users in respect of the Quadriga CCAA proceedings. Representative Counsel can be contacted via email at: quadrigacx@millerthomson.com.
At-a-glance
Related Categories
Business Details
- Location of This Business
- 223 2055 Commercial Dr, Vancouver, BC V5N 0C7
- BBB File Opened:
- 28/7/2015
- Alternate Business Name
- Quadriga Fintech Solutions Corp
- 0984750 B.C. LTD.
- Business Management
- Aaron Matthews, Director of Operations
- Contact Information
Principal
- Aaron Matthews, Director of Operations
Customer Contact
- Aaron Matthews, Director of Operations
- Additional Contact Information
Phone Numbers
- (604) 243-7056Other Phone
- (604) 243-7056
Customer Complaints
0 Customer Complaints
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