QuadrigaCX investigation has been on the radar of various regulatory watchdogs, and this time, it is the Canada Revenue Agency (CRA) who is going through the tax file returns filed by the now inoperative and once largest Canadian cryptocurrency exchange.
What started of as a run-of-the-mill local trading online exchange in 2013, experienced a surge in Bitcoin transactions when the hysteria around Bitcoin was sparked in 2017. QuadrigaCX soon ran into accounting problems considering its inability to cope up with the rapid increase in cash flow.
Things took a downturn when Bitcoin prices slashed, and the exchange was unable to pay off its users. The external payment processor it used, reported loss of over eight hundred and fifty million dollars ($850 million) and to date, no one really knows what QuadrigaCX did with the customer deposits they received.
Since then, the Canadian exchange has been grabbing headlines. Last year, its CEO Gerald Cotten was declared dead without revealing access information to company’s account. Thus, began the investigations. Last month, four regulatory watchdogs started their independent investigations into what went wrong.
CRA now part of the QuadrigaCX investigation
According to Globe and Mail on Sep 16, CRA will conduct a financial audit of the firm and has requested for tax papers from Oct 01, 2015 to Sep 30, 2018. The bankruptcy trustee, who is supervising the firm’s insolvency proceedings, states that handing over the requested documents to CRA is a crucial step in the investigation as the relevant findings will be discussed in the court for enjoinment.
EY also admits that complying with information requests would mean assessing the available amount to repay the firm’s eleven thousand five hundred creditors.
And while EY has already begun focussing on document collection and review, responding to CRA’s request may not happen anytime soon as it seeks to conduct its production efforts in the most cost-efficient manner.
Meanwhile, speculations continue to build over QuadrigaCX investigation as many of its creditors refuse to believe in the CEO’s death story and claim that he may have faked his own death to deceive customers with an exit scam.