Creditors of Quadriga CX will finally get paid after two years of uncertainty and financial loss. With obligations totaling C$215.7 million, the Canadian cryptocurrency exchange sought bankruptcy protection in 2019, leaving its creditors seeking for assistance.
Recent reports, however, state that the trustee in charge of the bankruptcy proceedings has declared that creditors will be paid 13% of every dollar owed to them. Many who had invested in the exchange and were left stranded when it filed for bankruptcy expressed that this was a huge relief.
The payment was made following a extended court struggle that started when the exchange’s founder Gerald Cotten passed away unexpectedly in December 2018. Due to Cotten’s passing, Quadriga CX could not access most of the customer cash stored in its cold storage wallets. The exchange’s assets suffered a severe shortage, giving its creditors little possibility of getting their money back.
According to reports, Quadriga CX had defaulted in paying its taxes for two years before its went bankrupt. This caused them to owe the Canada Revenue Agency (CRA) an accumulated debt of $11.7 million hence, made the bankruptcy process much more difficult.
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Quadriga CX Gets Ready To Disburse 13% Per Dollar
Despite these difficulties, the bankruptcy trustee in charge of the proceedings obtained part of the exchange’s assets, which will now be given to creditors. Experts say that although the reimbursement of 13% of each dollar owing is minimal, it represents a big relief for those who had invested in the exchange. Creditors of Quadriga CX have reacted differently to the announcement of the settlement.
While some former investors are delighted to get paid for their losses finally, others believe the amount is insufficient to make up for what they lost in cash. When interviewed, a former Quadriga CX investor John Smith said, “I made a sizable investment in Quadriga CX, and although I’m happy to get paid eventually, it’s not enough to make up for the money I lost.”
The reward also serves as a reminder of the dangers of cryptocurrency investing. Investors are prone to fraud and theft because of the unregulated and decentralized nature of the market, which makes it challenging to hold exchanges responsible for their conduct.
Despite the dangers, cryptocurrencies are becoming increasingly popular, and more investors are entering the market daily. People who had invested in the exchange will finally feel some relief with the payment made to Quadriga CX debtors.
Analysts have also advised that even while the 13% dividend on each dollar owing is insufficient to compensate investors for their financial losses, they should have provided some more compensation that will make up for those years of uncertainty. The revelation highlights the need for more regulation and control in the sector and serves as a reminder of the dangers of investing in cryptocurrencies.