Quadriga clients won't get help from British Columbia regulator on lost crypto millions
- British Columbia’s securities regulator said it has no authority over the crypto exchange and can do little to help investors reclaim lost investments
- Quadriga CX CEO Gerald Cotten died in December, leaving no instructions or electronic keys to access crypto assets held on the exchange
The latest twist in the crypto drama that stranded US$145 million in assets on Quadriga CX brought more bad news for investors: British Columbia’s securities regulator said Thursday it does not have jurisdiction over the exchange.
The provincial agency “does not currently have any indication that Quadriga CX, the crypto asset trading platform, was trading in securities or derivatives or operated as a marketplace or exchange under British Columbia securities laws,” Brian Kladko, a spokesman for the British Columbia Securities Commission, said in an email statement. “As such, BCSC does not regulate it.”
Vancouver-based Quadriga CX has been unable to access C$190 million (US$145 million) in bitcoin and other cryptocurrencies belonging to its customers since its chief executive officer Gerald Cotten – who had the electronic keys to access the cache – died in December. That has left 115,000 users scrambling to figure out how to get back their money.
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The Canadian Securities Administrators, an umbrella group, published an investor alert last June urging Canadians to be cautious when considering buying crypto assets through trading platforms. The alert said a platform may call itself an “exchange,” but it may not be selling or trading securities or derivatives and, if such is the case, it will generally not be subject to regulation under securities or derivatives laws.
To date, no cryptocurrency exchange has been recognised as a marketplace by Canadian securities regulators, Kladko said.
British Columbia’s securities regulator does have some oversight on the exchange owner, Quadriga Fintech Solutions Corp, which is a public company. The commission ordered that shares of Quadriga Fintech cease trading in March 2016 for failing to make required filings.
Those looking for recourse cannot turn to the courts just yet. Quadriga CX was given creditor protection this week in Nova Scotia Supreme Court, essentially halting any legal claims against it while the firm gets onto firmer financial footing. Cotten, who essentially operated the exchange from his laptop computer, resided near Halifax, Nova Scotia.
Canada’s federal police agency, the Royal Canadian Mounted Police, knows of the crypto firm, but has not indicated whether it is investigating.
“The RCMP is aware of the allegations against Quadriga CX,” Sgt. Penny Hermann said in an email. “We will not be providing any further information.”
