Judge Moves to Block Potential Lawsuits Against QuadrigaCX Exchange

A judge in Canada will rule in favor of a creditor protection request filed last week by Canadian crypto exchange QuadrigaCX, issuing a 30-day stay of proceedings.

The controversial platform went offline last week, later announcing that it was filing for protection under the Companies' Creditors Arrangement Act due to its inability to locate its "Significant cryptocurrency reserves," which may total as much as $137 million.

The company sought to preempt any litigation from customers hoping to recoup their losses, according to the filing.

She told CoinDesk Monday that she anticipated the exchange would receive the protection, and that professional services firm EY would be appointed as a monitor to oversee Quadriga's processes and procedures over the next several months.

EY was appointed as a monitor for the exchange, tasked with helping it locate any assets that can be quickly recovered or sold off to begin reimbursing anywhere from 90,000 to 115,000 customers who had funds locked up in the exchange.

Attorneys for the applicants, which include QuadrigaCX and EY, now have five days to serve the 115,000 customers owed funds with notice of the order.

The bulk of Quadriga's missing funds are said to be in cold wallets, offline storage commonly used as a security precaution against hacks and thefts.

An initial EY filing said the company would have to focus on determining whether there are any reserves in cold storage, and how to access them.

As Chiasson explained, due to the "Urgent" nature of the filing, notice was not provided to the majority of creditors, though he added that a note was published to the exchange's website and internet forums shared information about the filing shortly thereafter.

Attorneys claiming to represent potential creditors said they did not oppose the order, clearing the way for Tuesday's approval.