Judge Delays Decision On Legal Representation for Quadriga Creditors

A Canadian judge declined to name any law firms to represent as many as 115,000 users of QuadrigaCX, deferring that significant decision by a week.

Nova Scotia Supreme Court Judge Michael Wood said during a hearing Thursday that he would not appoint any firms as representative counsel or make any other decisions regarding creditor representation immediately, though he plans to have a final decision within the week.

Another law firm, Goodmans LLP, wrote a letter calling for an extended appointment process, saying a committee of creditors who can coordinate should be created beforehand.

Whichever law firm team is appointed would be tasked with coordinating between Quadriga as it seeks to recoup roughly $196 million it owes its creditors and those whose balances are stuck on the exchange specifically.

Professional services firm EY, a court-appointed monitor for Quadriga, explained in court Thursday that its oversight was being funded through a $300,000 lump sum dedicated to the process.

The companies are working with some of these processors to have the exchange's funds released, though at least one is claiming it "Has the right to continue to hold funds."

The firm was not named, though in previous court filings, Quadriga identified WB21 as a payment processor which refused to release funds to the exchange.

José Reyes, Billerfy's managing director, said at the time that the company was having difficulty finding a bank willing to work with crypto-related funds, causing delays.

The report did not specify what the total value of these drafts was, though in its initial filing, Quadriga identified some $565,000 being held by a total of three processors.

A hearing will be held on Feb. 22 to help facilitate the transfer of these funds to EY. Attorneys for EY and Quadriga apparently did not discuss how efforts to recover $136 million in cryptocurrencies currently locked in cold wallets are proceeding.