Cryptocurrency exchange QuadrigaCX is allegedly not regulated by the province’s financial regulator, British Columbia Securities Commission (BCSC).
This is according to a report on Reuters.
QuadrigaCX — which is based in Vancourver — was founded in 2013 and is allegedly the first exchange in Canada to be licensed by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The report indicated that the BCSC knew of Quadriga since 2017. However, the exchange was unregulated as there were no signs that Quadriga traded securities or derivatives, or functioned as an exchange in general.
“As such, BCSC does not regulate it,” a BCSC spokesman Brian Kladko was quoted as saying in the report.
At the start of this month — after the sudden death of its 30-year-old founder Gerald Cotten — it was reported that QuadrigaCX is missing CA$190 million dollars ($145 million) in digital assets.
QuadrigaCX has not been able to access its cold wallets, where the exchange held most its assets, as Cotten was the only one that had access to keys for the wallets. News recently broke that Cotten filed a will 12 days before his death, where he pointed to his wife, Jennifer Robertson, as the only beneficiary and the executor to his estate.
Cotten’s death caused some controversy in the crypto community, with some customers alleging he faked his death to rob them of their assets. However, a death certificate that was issued by the Government of Rajasthan’s Directorate of Economics and Statistics, was unveiled, which indicated that Gerald William Cotten died on December 9.
In response to customer charges, Robertson stated in an affidavit that “I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.”
She also stated that “there have also been threats made against [her].”
Earlier last year, Quadriga suffered difficulties accessing $21.6 million of its funds, when the Canadian Imperial Bank of Commerce (CIBC) froze five accounts that belonged 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.
However, Judge Glenn Hainey of the Ontario Superior Court ruled in favor of the bank, saying that the owner of the funds was not clearly proven. According to the ruling, CIBC then had to pass the funds over to the Accountant of the Superior Court, so the court could identify the owner.