QuadrigaCX Judge Approves $1.6 Million in Expenses for EY, Law Firms

A Canadian judge approved more than $1.6 million in fees for firms that are seeking to recover funds from the now-defunct Canadian crypto exchange QuadrigaCX. Nova Scotia Supreme Court Judge Darlene Jamieson ruled Wednesday that all activities undertaken and fees incurred by Ernst & Young, Stikeman Elliot, Kirkland & Ellis, Miller Thomson and Cox & Palmer under the ongoing Companies' Creditors Arrangement Act proceeding on behalf of Quadriga would be approved.

"There being no expressed opposition to the activities and accounts as presented by the monitor nor to the fees of its legal counsel, I approve the fees and activities of the monitor during the CCAA proceedings and the fees presented towards legal counsel," Jamieson said.

EY had a complicated task in trying to recover Quadriga's missing cryptocurrencies and fiat holdings from third parties, as well as in trying to determine whether Quadriga indeed held the funds it claimed to have, the judge said.

The payments will come from the recovered funds in the creditor accounts, which total roughly $25 million, according to a previous report by EY. This leaves roughly $23.4 million to be distributed among the creditors.

EY is trying to secure another $9 million by selling off certain assets from the estate of Gerald Cotten, Quadriga's deceased founder and CEO. Miller Thomson recently also kicked off the claims process for Quadriga creditors, with information posted to its website.

Users will need to provide their Quadriga account number, full name, telephone number and address, as well as the amount of each cryptocurrency and fiat they held in the exchange prior to its closure.

At the time, his widow, Jennifer Robertson, filed an affidavit claiming that Quadriga owed roughly 115,000 users a combined $190 million, and that she could not access any of its funds as Cotten was the only operator with knowledge of the private keys for its crypto accounts.

EY reported in March that it could not locate or account for more than $100 million in various cryptocurrencies that the exchange was supposed to have held.

While the exchange entered the CCAA process in January, EY moved to have it placed in bankruptcy, indicating that Quadriga will not recover from the losses.

Nova Scotia Supreme Court Judge Michael Wood approved the motion, with bankruptcy operations running parallel to the CCAA proceeding.