Update 12:56 GMT-4 – the EY Monitor and more lawyers for the customers will be making their views known after 2pm
Update 12:47 GMT-4 Judge suggests “come back” date i.e 30 days from today – 7 March as the deadline by which to have sorted out counsel representation. Lawyers push back. $260m has gone missing, thousands trading info online and making threats. Court adjourned until 2pm (GMT-4).
Update 12:42 GMT-4 Lawyer for one group of creditors wants the representation issue resolved as soon as possible. How about Thursday? Judge replies “how about next Thursday”. Says doesn’t have time now.
Update 12:38 GMT-4: Judge now going to listen to the arguments as to which lawyers will represent the many plaintiffs. He expects many lawyers to argue their case.
The widow, Jennifer Robertson is not in court for “security reasons”. That’s understandable given the vitriol on social media.
The aim of the proceedings is to protect Quadriga from its creditors with a 30-day stay.
A group of lawyers at the proceedings say they represent customer who are collectively owed C$10 million.
These lawyers acting on behalf of customers do not object to Quadriga seeking a stay.
Lawyers say they tracked down a bank at the weekend that was holding C$11 million.
A firm named Weddell Phillips has the Cotten laptop.. It has been examined by a Royal Canadian Mounted Police computer expert and is now with lawyers acting for creditors and will eventually be passed to the court-appointed monitor.
Quadriga lawyers confirm that $180 million worth of crypto is “floating around out there”.
Here’s a picture of lead lawyer for Quadriga Maurice Chiasson. Asked by CBC reporter Jack Julian is he would answer questions he said “probably not”.
They say they need the 30-day stay to “find these assets to the extent that they exist”.
In what sounds like a dig at reddit posters, the lawyers say they want to do this in an organised fashion: “Hopefully that’s more reliable tahn what you find in a chat room.”
Regarding the C$25 million that was released by the Ontario court after it was unfrozen in the CIBC tussle last year, those funds are in possession of payment processors, for example Billerfy.
C$5 million was held by New Brunswick companies and Quadriga lawyer now have this money. They say thety “hope to find all the walllets, and make people whole”, which is nice. The Lawyers continued with the assertion that there are coins that are now being found and need to be stored somewhere. They argue that Quadriga should store them(!!).
The judge begs to differ and says the monitor should do the storing.
Because the exchange dosen’t have full accounts there’s a job of work to be done to workout who is owed what and where funds are.
You can get a feel for the amateurish nature of business operations from this picture of bank drafts presumably worth million of dollars.
Given that there “is a lot of anger looking to find a home” according to one lawyer, the proceedings turn to the matter of “interfacing with stakeholders”. Quadriga opposes making client list public, which is probably a good thing.
The website will remained closed by order of the court but the monitor proposes setting up a separate website and hotline to keep all concerned informed of developments. The Quadriga site may be used for communication at a later date.
A CCAA [Companies Creditor Arrangements Act] order will set up a subreddit. That’s going to be interesting!
The CCAA order will include posting a notice to creditors in a subreddit. Subreddit TBA. I wonder if they know what a worm can that is…
— Jack Julian (@JackJulian) February 5, 2019
The Monitor raises the possibility that some creditors might challenge whether Canada is the right jurisdiction to judge matters even though Quadriga is a Canadian company. Says probably best to leave that question open for now. She adds that the C$5 million in Canadian bank drafts helps to anchor the case in Canada.
This is not a typical bankruptcy because of the locked cold wallets.
Counsel for creditors says the USBs and laptop must be entrusted to the Monitor in Toronto. The lawyer says representing 78 clients owed C$11 million, confirming what we previously mentioned above.
Lawyers want all entities and prisons holding Quadriga property to surrender it to the Monitor (Ernst & Young).
Monitor to set up a cold wallet. Judge Wood is satisfied a stay should be ordered.
Judge is going to take a break:
Wood says the court does have jurisdiction. That Nova Scotia is the correct filing jurisdiction. He wants to reflect on the details of the order. He’s going to take a break. But he has drafting questions.
— Jack Julian (@JackJulian) February 5, 2019
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane