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QuadrigaCX’s auditor EY and its lawyers will get $1.6M while victims are kept waiting

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A judge in Canada has approved over $1.6 million in fees for businesses seeking to recover funds lost as a result of QuadrigaCX’s demise.

In a legal notice published yesterday, Nova Scotia Supreme Court Judge Darlene Jamieson said: “There being no expressed opposition to the activities and accounts as presented by the monitor nor to the fees of its legal counsel, I approve the fees and activities of the monitor during the CCAA proceedings and the fees presented towards legal counsel.”

“The monitor’s work has been extensive in administering the CCAA proceeding and seeking to recover funds on behalf of Quadriga and its affected users,” the judge noted.

“The monitor has faced complicating factors, including a lack of books and records, and the use of third parties to store information. This is the first insolvency case in Canada involving cryptocurrency and has presented a number of unique issues, including requiring specialized resources for the monitor’s investigation,” she added.

The Canadian cryptocurrency exchange made headlines the world over after court documents revealed its founder Gerald Cotten had suddenly passed away in India.

Cotten was the only person thought to have access to passwords for the exchange’s cryptocurrency wallets. His widow Jennifer Robertson filed an affidavit at the time, alleging that QuadrigaCX owed $190 million to its customers.

Subsequent investigations by Ernst & Young (EY), the court-appointed monitor tasked with recovering the missing cryptocurrency and fiat funds, have since found that Cotten may have used fake trades to appropriate customer funds.

Overall, the judge approved $1,631,161.99 ($2,143,442.44 CAD) in costs to EY, Stikeman Elliot (EY’s legal counsel), Kirkland & Ellis (EY’s American legal counsel), Miller Thomson (counsel), and Cox & Palmer (counsel).

The money will come from the recovered funds in the creditor accounts, which stand at approximately $25 million, meaning there’s still $23.4 million available, CoinDesk says.

Published August 1, 2019 — 11:12 UTC