Digital Currency "Cold Storage" Wallet Case Heats Up in CanadaScroll Down
On February 19, the Supreme Court of Nova Scotia announced in a filing that it had ordered a pair of Canadian law firms to represent the customers of the embattled digital currency exchange QuadrigaCX. Justice Michael Wood indicated that firms of Cox & Palmer and Miller Thomson would represent a committee of QuadrigaCX's customers, who themselves are representing the rest of the customers. The two law firms will have a number of responsibilities. These include the handling of communications with the exchange's users, liaisoning with the Ernst & Young monitor, representing the interests of the exchange's users in court, identifying any potential conflicts of interest among users, and maintaining the privacy of users. Justice Wood has told the attorneys that he wants all the legal proceedings to be handled as efficiently and cost-effectively as possible, by creating a straight-forward mechanism for communicating with the exchange's users. He also wants to avoid a situation in which multiple (and possibly conflicting) retainers are initiated. The next hearing in the matter is scheduled for March 5. The judge wants every party involved to agree by then on all or most of terms of the order that the court will consider. The court's decision comes less than a week after the last hearing of the case. On February 14, more than 12 law firms appeared before the court in the hope that they would represent the 115,000 QuadrigaCX customers who currently have no access to funds amounting to nearly 200 million U.S. dollars. On February 13, Ernst & Young issued a report entitled "First Report of the Monitor." It stated that, on February 6 of this year, QuadrigaCX mistakenly transferred more than 100 Bitcoins to a cold wallet controlled by the exchange's founder and owner Gerald Cotten. The coins transferred were worth about 468,675 Canadian dollars. QuadrigaCX has been in the news ever since the unexpected passing of Cotton. Reportedly, he alone had access to the exchange's cold wallets and its keys, effectively locking out users from their money.