Canadian cryptocurrency exchange QuadrigaCX is down for maintenance, according to an announcement on its webpage on Jan. 28. The exchange, which has been wrapped up in legal troubles with the Canadian Imperial Bank of Commerce (CIBC), is inaccessible as of press time.
Screenshot of QuadrigaCX Webpage. Source: QuadrigaCX
The exchanges users, some of whom have purportedly been unable to access or withdraw their funds for months, took to Reddit and Twitter. One user asked, “Shouldn't you let your customer know before taking it down?” Some users on a Reddit post speculated as to whether the exchange had gone insolvent. One commenter stated, “They will declare insolvency due to an inability to find a suitable bank to host an account and facilitate transfers.”
In October 2018, the exchange disputed a $19.6 million sum with the CIBC. The Globe and Mail then reported that QuadrigaCX had been experiencing difficulties accessing $16.3 million of its funds since January, when the IBC froze five accounts belonging to the exchange’s owner, Jose Reyes and its payment processor, Costodian Inc.
CIBC subsequently requested the court to withhold the funds and determine whether they belong to Costodian, the exchange, or the users who deposited the funds. The Ontario Superior Court then ruled in favor of the bank, agreeing that the owner of the funds is not clearly established. CIBC was then obliged to pass the funds over to the Accountant of the Superior Court in order to identify the owner of the money.
The situation is further complicated by the apparent death of the exchange’s founder, Gerry Cotten. A statement regarding the sudden passing of Cotten, which is no longer available as the site is down, is referenced by the exchange in a Reddit post.
Following the post, some users asked for proof of death, while one even posited the theory that the exchange could not access assets in cold storage, as the keys were only known to Cotten.