Sean Glendinning is one of many investors who got burned in the QuadrigaCX cryptocurrency meltdown.
“I had been trading with them for about a year and a half, amongst other exchanges, but Quadriga was the easiest to use and easiest to transfer to Canadian funds,” said Glendinning, who’s an active member of a Kelowna-based cryptocurrency discussion forum.
He wouldn’t say how much he lost when the virtual operation tanked on Jan. 28 amid a flurry of controversy. An estimated 115,000 users of the QuadrigaCX exchange are owed $260 million in cash and digital assets.
He did say, however, he’s wary of future investments of a similar kind.
“I have still have money in the other exchanges, but it’s profit money,” he said. “I am not going to invest any of my own money. There’s still a chance long term that there will be value in crypto currency, I have no idea and I don’t think anyone’s does.”
Working in IT has made Glendinning alive to the potential of tech-based investments. He runs a number of different businesses and pointed out that with the way tech changes, it’s quick for something “to TedX, overnight.”
“I invested in Netflix and it’s worth three times what it was when I started,” he said. “Things can go the other way, like BlackBerry, but they can (explode) in tech and they will happen more frequently as technology changes.”
Quadriga’s turn of fortune, however, took Glendinning by surprise.
“This is such a speculative currency,” he said. “It’s not too much different than investing in a startup company. You put in $10,000 in a start up and it could disappear tomorrow, but a lot of other exchanges didn’t seem as well put together. Canadian banking rules are strict, and most of these exchanges won’t work with the banks, so I am surprised that Quadriga’s went the way it did.”
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He pointed out that the value of bitcoin and other currencies have decreased in value since Quadriga’s issues so more people are likely to be wary going forward.
The courts certainly are treating it carefully.
A Nova Scotia judge last week issued an order for the eventual disbursement of more than $30 million that belonged to the insolvent QuadrigaCX trading platform.
Lawyers for the Bank of Montreal and the court-appointed monitor overseeing the case, Ernst and Young, said the banks are uncomfortable handling money from the cryptocurrency world, saying the uncertain origin of the funds raises concerns about possible money laundering.
At the conclusion of the hearing, Justice Michael Wood of the Nova Scotia Supreme Court issued an order that will eventually see the QuadrigaCX money deposited in a Royal Bank account, which Ernst and Young will use to pay for the ongoing court proceedings.
As the financial issues get worked out, Glendinning will be among those who play close attention to other narratives surrounding Quadriga’s fortunes.
CEO and sole director, Gerald Cotten of Halifax, died suddenly on Dec. 9 while travelling in India, leaving his company without access to about $190 million in Bitcoins and other cryptocurrency.
According to the CEO’s widow, Jennifer Robertson, Cotten was the only member of the QuadrigaCX team who knew the encrypted pass codes needed to gain access to the company’s cryptocurrency reserves.
“I question whether this guy is even dead,” said Glendinning. “There are a lot of conspiracy theories out there, but for this guy to die with his wife next to him with no backup plan, it’s strange.”
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