E&Y Reveals QuadrigaCX Assets and Debt
Big Four audit firm, Ernst & Young (E&Y) released its report outlining now-defunct cryptocurrency exchange QuadrigaCX’s, and its subsidiaries’, assets and debts.
E&Y was assigned as the Monitor for the creditor proceedings of the cryptocurrency exchange, and was later also assigned as the Trustee for the company’s bankruptcy proceedings.
Details of the Report
According to E&Y’s report, the company has only $21 million in assets and owes its creditors $160 million. This report is dated May 1, but was published on the auditor’s website on May 9.
The report covers financial details about 3 legal companies that are associated with the cryptocurrency exchange. These 3 companies are Quadriga Fintech Solutions, 0984750 BC Ltd. and Whiteside Capital Corporation. Each entity has been presented as individually bankrupt.
The report outlines the details of each company’s assets and debts separately. As of April 12, Quadriga Fintech Solutions had C$254,180 (~$189,345) in assets and C$214,873,113 (~$160,051,461) in debts. 0984750 BC had C$28,649,542 (~$21,343,192) in assets and C$215,697,147 (~$160,688,982) in debts. And finally, Whiteside Capital had no assets, and C$214,618,937 (~$159,875,011) in debts.
According to E&Y’s employee who is acting as the Monitor and Trustee of QuadrigaCX, George Kinsman, there was a material discrepancy in some of the companies’ finances. Added to that poor book-keeping made the process even more difficult.
Where are the Missing Funds?
QuadrigaCX’s financial situation was first made public when the widow of founder and CEO Gerald Cotten, Jennifer Robertson had filed an affidavit that the cryptocurrency exchange was not able to access the company’s funds from its cold wallets after his sudden death.
However, despite its efforts, E&Y was not able to locate any funds in the addresses of cold wallets provided by the cryptocurrency exchange, with the exception of the 103 BTC (Bitcoin) that had been accidentally transferred from the company’s hot wallet.
Kinsman wrote in his report that a complete review of Quadriga’s financial situation would take a significant amount of time as well as effort. He continued, stating it might not be possible or even cost effective to complete this task due the sheer volume of transactions processed by the company, the number of 3rd party payment processors and crypto exchanges involved in these transactions, as well as the complete lack of information about these funds.
Kinsman also stated that many of the parties, especially the cryptocurrency exchanges had not fully cooperated with E&Y’s investigations into the missing funds.