The Ontario Superior Court of Justice has decided to safeguard the funds in dispute between the QuadrigaCX crypto exchange house and the Canadian Imperial Bank of Commerce (CIBC). The Court will have custody of the funds until it is determined to whom they belong.
In October, QuadrigaCX sued the CIBC for unexpectedly freezing its accounts. The funds in the accounts totaled $28 million. On November 9th, the court published a document stating that it will safeguard the assets until it decides in favor of either party.
Back in January, the CIBC froze three personal accounts and two business accounts. These accounts belonged to QuadrigaCX’s payment processor and its owner, Jose Reyes. According to the CIBC, the transfer of assets from the payment processor to Reyes’ accounts was suspicious. QuadrigaCX sued the Bank claiming that they own most of the funds. The CIBC asked the Court to take custody of the funds while their ownership will be determined. The document issued on Friday is the Court’s response in favor of the Bank.
Canadian Court Takes Custody Of QuadrigaCX Crypto Exchange Funds, Frozen By The Canadian Imperial Bank of Commerce
In an October statement, the president of the crypto exchange, Gerard Cotten, said CIBC’s actions were detrimental to the company’s operations. Most of the funds were in QuadrigaCX’s trading accounts. User withdrawal operations have been delayed, according to Cotten. Apparently, the losses generated and the malfunctioning of the exchange could be ignored by the court. Judge Glenn Hainey, in charge of the lawsuit, stated on Friday that the Court could not determine whether or not the CIBC’s actions effectively harmed the crypto exchange.
The Court asked the CIBC to provide further evidence before making a decision. Although the Court has not ruled in favor of the Bank, ultimately the freezing of accounts has harmed the exchange house. This situation is not new, because recently there has been a crusade by banks against crypto exchanges, especially in Chile and Brazil.
At the suggestion of his lawyer, the president of QuadrigaCX refused to answer whether all the funds received had been credited to users’ accounts. For this reason, the judge ruled that there might be a possibility that users might file a claim requesting the return of their funds. CIBC could participate in this claim, too.