In line with a recent report by national public broadcaster ‘CBC’, Canadian banks have showed hesitation regarding the management of insolvent cryptocurrency exchange named QuadrigaCX’ assets.
QuadrigaCX faced monetary issues following the sudden demise of its founder ‘Gerry Cotten’, who was the allegedly solely able to access the exchange’s cold wallets.
As ‘reported‘ earlier this month, QuadrigaCX has sent its remaining crypto assets from its hot ‘wallets‘ to renowned auditing firm Ernst & Young, the court-appointed monitor overseeing the case. Throughout Friday’s court hearing, lawyers for the Bank of Montreal along with the auditing firm reportedly aforesaid that the banks are uncomfortable managing the funds, citing the uncertainty of their origin.
The lawyer ‘Elizabeth Pillon’ representing Ernst and Young, is quoted by CBC stating that she does not blame the banks for their hesitation since there are allegedly ML [Money Laundering] problems. Explaining further Pillon added:
“The monitor has serious concerns regarding finding another institution to carry these funds.”
As per the article, by the end of Friday’s hearing, Justice Michael Wood of the Nova Scotia Supreme Court issued an order that may eventually see the QuadrigaCX’ cash deposited within Royal Bank.
Ernst and Young will be then using these funds to pay for the ongoing court proceedings, and “the money might also be employed to partly compensate 115k users of the QuadrigaCX exchange who are owed $260 Mln” in cryptocurrencies and standard fiat currency, CBC added.
The slowness to hold QuadrigaCX funds additionally manifested via the time of its operations, after the exchange was unable to obtain a bank account because ‘banks’ reluctance and instead turned to 3rd-party payment processors.
As ‘reported‘ earlier in Nov. last year, after the Canadian Imperial Bank of Commerce froze the accounts of the payment processor, the court dominated in favor of the bank, citing considerations over distinguishing the identities of the funds’ owners.