This article was written by the team at Stikeman Elliott.
Cryptocurrency has been recognized as “property” for the purposes of the Bankruptcy and Insolvency Act by the Ontario Superior Court of Justice (Commercial List) in Re Quadriga Fintech Solutions Corp. et al., the first Canadian case of its kind. The Court also fixed the date of bankruptcy as the date for valuing claims denominated in cryptocurrency.
The Quadriga case arises from the collapse of QuadrigaCX, a Canadian cryptocurrency exchange launched in December 2013, that facilitated the buying, selling and trading of Bitcoin and other cryptocurrencies. Following the sudden death of QuadrigaCX’s co-founder and CEO, Mr. Gerald Cotten, on December 9, 2018, QuadriaCX’s exchange was suspended and thereafter the Nova Scotia Supreme Court granted Quadriga Fintech Solutions Corp. and certain of its affiliates an initial order pursuant to the Companies’ Creditors Arrangement Act (the CCAA) on February 5, 2019. Ernst & Young Inc. was appointed as the Monitor.
On April 14, 2020, the Ontario Securities Commission issued a review of QuadrigaCX that focused on how QuadrigaCX operated, what happened to clients’ assets, the causes of its asset shortfall, and the implications of securities law.
On April 15, 2019, the CCAA debtors were assigned into bankruptcy under the Bankruptcy and Insolvency Act (the BIA). Ernst & Young Inc. was appointed as the Trustee-in-Bankruptcy.
The Quadriga case is one of the few cases involving a CCAA proceeding that transitions into a bankruptcy, and one of the only cases dealing with whether claims should be valued as of the date of the CCAA initial order or the date of bankruptcy.
Read more about the effects of this case on bankruptcy actions and cryptocurrency.
 Re Quadriga Fintech Solutions Corp et al. (1 March 2021), Toronto CV-19-627184-00CL (31-2560674), CV-19-627185-00CL (31-2560984) and CV-19-627186-00CL (31-2560986) (Ont Sup Ct [Comm List]) [Quadriga].