Canadian Crypto Crypto Exchange QuadrigaCX Blames Major Bank for Delays

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Canadian Crypto Crypto Exchange QuadrigaCX Blames Major Bank for Delays

Canada’s largest digital currency exchange QuadrigaCX is blaming legal action from a major bank for delays when customers cash out funds, the Globe and Mail reported Oct. 8.

Vancouver-based crypto exchange QuadrigaCX was launched in 2013 and is known as the first exchange in Canada to be licensed by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). At press time, Quadriga’s daily trading volume is around $600,000 per CoinMarketCap.

Quadriga reportedly states that it has been experiencing difficulties accessing $21.6 million of its funds since January when the Canadian Imperial Bank of Commerce (CIBC) froze five accounts belonging to the exchange’s payment processor, Costodian Inc., and its owner, Jose Reyes. The bank purportedly froze the accounts due to an inability to identify the funds’ owners.

From Dec. 4, 2017, to Feb. 20, 2018, 388 users reportedly deposited a total of $51.8 million into the accounts, according to CIBC. Later, some of these funds were withdrawn, leaving about $21.6 million in the accounts.

According to the Globe and Mail, CIBC requested the court to withhold the disputed funds and decide whether they belong to QuadrigaCX, Costodian, or the 388 users who had deposited the funds. Quadriga subsequently told the court that the bank froze the funds mistakenly, and claims to be the undisputed owner of the greater part of the funds as there is “no evidence” of competing claims. Quadriga said:

“This court should not succumb to the bank’s unsubstantiated and highly offensive speculation that there must be shady dealings afoot because Quadriga’s business is a trading platform for individuals trading in cryptocurrencies.”

Gerald Cotten, CEO at Quadriga, said that the legal matter has resulted in delays for a “small fraction” of the exchange’s 350,000 users. None of the allegations has been proven in court, per the Globe and Mail. Cotten said:

“There are currently delays for some specific withdrawal options, particularly due to the fact that CIBC is withholding tens of millions of dollars that belong to us that were in an account of one of our payment processors.”

The number of participants in the crypto space who have been shut out by banks is “staggering” according to Cotten. According to the Globe and Mail, Quadriga has told the clients that banks in the Canada are “conspiring” against crypto businesses.

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