Evan Thomas, Lori Stein, Louis Tsilivis
Dec 13, 2019
Cryptoassets made headlines in Canada in 2019, and not always for the best reasons. Early in the year, a media hurricane swirled around the QuadrigaCX cryptoasset trading platform, whose founder apparently died while on honeymoon in India, allegedly taking with him the private keys for the platform’s cryptoasset reserves. The platform attempted to restructure under court protection but was soon put into bankruptcy. Now, 75,000 customers face a collective loss of potentially more than C$200 million. Further investigation revealed a complete absence of financial controls, apparent misappropriation and misuse of customer assets, and other business practices that were particularly dubious for an enterprise that customers entrusted with hundreds of millions of dollars of assets.
Regulation may yet rein in the unrulier parts of the cryptoasset sector. Shortly after QuadrigaCX’s collapse, Canadian securities regulators proposed a framework for regulating cryptoasset trading platforms, which would include provisions relating to custody, internal controls and business continuity...
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