The maximum tax authority in Canada, the CRA, is looking to know more about QuadrigaCX’s corporate tax returns and is starting an audit process, according to the entity administrating the troubled cryptocurrency exchange’s bankruptcy.
The development was first published by The Globe and Mail at the start of the week. The Canadian Revenue Agency (CRA) is going to look at the tax returns of the controversial platform specifically in the timeframe starting on October 1, 2015, and September 30, 2018.
Ernst & Young, the bankruptcy trustee, determined by the court managing the case, informed that the trustee’s intention is discussing the information petition made by the CRA Audit, with the possibility of going back to the court if necessary for further guidance.
A Controversial Death
The world-famous Canadian exchange and trading platform came to the spotlight late in 2018 following the sudden death of Gerald Cotten, its Chief Executive Officer. The problem was that he failed to create any measures to recover the password of QuadrigaCX’s crypto assets, which caused millions of dollars worth of digital assets to be essentially locked out.
Cotten’s death was extremely problematic to customers of the exchange, which are the ones that own most of the locked funds. The court got involved, and the recovery process started with some bumps on the road.
The process started early in 2019. However, the trustee discovered that Cotten had transferred a sizable portion of the clients’ funds to his accounts, even engaging in digital asset trading with these crypto holdings.
The Ernst & Young firm added that the trustee is currently in the process of collecting, organizing, and reviewing the facts and events in a way that consumes as little time as possible. Because of that, the trustee stated that it is not capable of responding to a CRA audit at the moment.
The audit company also observed that the fact the CRA, or similar agencies, are asking for information at this specific moment can have an effect on the final repayments to over 115,000 people related to the now-doomed platform. The thing is that the law is on CRA’s side, as there is no foundation to deny such a request from an agency from the government.
Other prominent agencies and law enforcement institutions are currently investigating QuadrigaCX’s fall. Among them are the Ontario Securities Commission, the United States’ Federal Bureau of Investigations (FBI,) and the RCMP, just to name a few.