QuadrigaCX, which is the largest crypto exchange headquartered in Canada, is under siege by Canadian banks. The Canadian Imperial Bank of Commerce (CIBC) seized USD 28 million from QuadrigaCX’s partner Costodian and the owner of QuadrigaCX, Jose Reyes, back in January 2018. This is a big sum of money for QuadrigaCX, since although it is the biggest crypto exchange in Canada, it processes less than USD 1 million in trading volume per day.
The CIBC filed a case with the Ontario Supreme Court of Justice, asking the court to take control of the funds, and for the court to decide if the funds belong to QuadrigaCX, Costodian, or the 388 customers which initially deposited the funds. QuadrigaCX is asking the court to unfreeze the funds, since it already credited customer’s accounts with Quadriga Bucks. It is unclear if the exchange will end up being insolvent if it can’t recover the money but at this time, it is still up and running – about ten months since funds were seized.
The reason for the seizure of the USD 28 million is unknown but highlights the continued friction between the crypto space and the banking system. The fund seizure occurred when Bitcoin was declining rapidly after hitting an all-time record of USD 20,000. Possible reasons stretch from money laundering to terrorism or Bitcoin being too risky for investors because of price swings. QuadrigaCX asserts that the CIBC is trying to find a reason to justify the seizure of the funds, and didn’t have any good reason for doing it. Further, it asserts the CBIC is part of a Canadian banking cartel that is trying to stifle Bitcoin, including the Royal Bank of Canada, the Bank of Montreal, and the Bank of Nova Scotia.
The freezing of bank accounts and seizure of funds is common in the crypto space. Although QuadrigaCX talks of a Canadian banking cartel, similar situations happen in the United States too. Banks can freeze, seize, and close accounts for any reason and don’t have to disclose the reason, although the law does say that money eventually has to be returned unless its associated with illegal activity.
Follow BitcoinNews.com on Twitter: @bitcoinnewscom
Telegram Alerts from BitcoinNews.com: https://t.me/bconews
Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.
Image Courtesy: Pixabay