Bankruptcy Trustee to Hand Quadriga Users' Information to Canadian Taxman

Ernst & Young (EY), the court-appointed bankruptcy trustee overseeing the winding up of crypto exchange QuadrigaCX, will be turning all user information over to the Canada Revenue Agency (CRA).

EY reported Tuesday that the CRA had asked for a trove of information about QuadrigaCX, whose customers have been waiting for more than a year to get back $190 million deposited on the exchange.

The requested information includes: financial statements and other business records; corporate legal records; documents related to contractors and other related parties; a list of accounts and wallet addresses, “detailed information” on the fiat and crypto owed to users, analysis on “user specific transaction activities,” and identified accounts.

“The Trustee has advised CRA that its intention is to simply produce a copy of the full EDiscovery Database, redacted only for privilege, in response to the CRA Production Demand,” EY’s latest report said.

The database does include users’ personal information, as well as account balances and transaction data.

It contains 750,000 individual documents, EY said in a previous report. At the time of its collapse, Quadriga had 115,000 users with balances on the platform.

See also: How to Stop the Next Quadriga: Make Exchanges Prove Their Reserves

Miller Thomson, the court-appointed law firm representing Quadriga’s former users, wrote in a letter Thursday it would not oppose the move in the interests of reducing costs and not further delaying any distribution of funds to the users.

Members of the creditor’s committee – a handful of former Quadriga users who represent the overall group in discussions with Miller Thomson – had differing views on the potential privacy concerns of turning this information over to the CRA, the letter said.

“Among other things, Committee members debated at length concerns about sharing the information with the CRA, the safeguarding of that information, the nature of the personal information contained on the Database, the value of the privacy interest affected, and the reasonable expectations of Affected Users,” it read.

Magdalena Gronowska, one member of the committee wrote on Twitter Thursday that the CRA’s request is “an unprecedented affront to individual privacy.”

“I’m concerned this smells like a [fishing] expedition,” she said, explaining that EY has already said in the past that it may be difficult to calculate taxes, and wondering whether the CRA really needs user data to calculate the exchange’s liability.

Toronto-based QuadrigaCX folded in early 2019 after reporting that its founder and CEO, Gerald Cotten, had died while traveling in India. Cotten had sole control over the exchange’s private keys and was the only individual operating it at the time of his death, his widow said in an affidavit. Quadriga’s former users question whether Cotten actually died or whether his death was natural, and have now asked Canadian authorities multiple times to exhume and autopsy his body.