In what is the latest twist in the ongoing QuadrigaCX saga, there is some more bad news for users of the Canadian exchange, as the British Colombia Securities Commission (BCSC) said on Thursday that the exchange does not fall under its purview, which means that users are not entitled to any kind of investigative or compensatory action by the regulator.
In the statement, BCSC insisted that it is not aware of any business activities carried out by QuadrigaCX that fall under its regulatory scope, and therefore it is not responsible for regulating the exchange, which is making headlines for allegedly losing about $180 million of user funds after its founder Gerald Cotton died with sole access to its cold wallets.
In an email to Bloomberg, a BCSC spokesperson said:
[BCSC] 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.
Canada’s Passive Aggressive Crypto Regulation Posture
It will be recalled that prior to its current round of controversy, QuadrigaCX previously made headlines in 2018 when it accused Canada’s ‘Big 5’ banks of colluding to frustrate its activities with the aim of slowing down crypto adoption in the country.
Canadian authorities have consistently refused to adopt a progressive crypto regulatory framework, choosing instead to focus on fighting cybercriminals using crypto and issuing tersely worded investment advisories to consumers.
This pattern does not look set to change, as the Canadian Securities Administrators (CSA) also issued another curtly worded statement on the matter, warning Canadian consumers against using crypto exchange platforms which it is keen to point out are all currently unrecognised by the CSA or any other Canadian securities regulator.
In an email to Bloomberg, CSA spokesperson Ilana Kelemen said:
The CSA continues to urge Canadians to be cautious when considering buying crypto-assets through trading platforms.
Earlier, CCN reported that the exchange filed for creditor protection in the Nova Scotia Supreme Court to give it time to get back its financial footing following the loss of its cold wallets.
With the news that BCSC will not intervene in the matter, the platform’s users will have to keep on waiting for a chance to commence legal action, as a judge on Tuesday provided a temporary reprieve for the company with a 30 day stay on claims from creditors and potential lawsuits.
In the meantime, to all intents and purposes, the $190 million in question remains lost forever, with all attempts to access the wallets unsuccessful so far. According to Cotton’s widow Jennifer Robertson, Cotton did not write down the keys anywhere before he passed away, and she has no knowledge of the wallet passwords or security keys.
According to Robertson, she has also been the recipient of a number of threats since news broke that Cotton’s will named her as his only executor and beneficiary. Many insist that Cotton’s death is unproven despite an Indian hospital’s attestation to the contrary, with the implicit accusation that the whole saga may be an elaborate exit scam.