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Ontario Superior Court Sides with Bank’s Decision

Ontario Superior Court Sides with Bank’s Decision

The plight of QuadrigaCX, Canada’s first and largest crypto exchange to have its accounts frozen through court orders has failed after the Ontario Superior Court sided with the bank.

QuadrigaCX had taken Canadian Imperial Bank of Commerce (CIBC) to court for freezing its accounts since January. In their defense, they are alleging the bank’s decision to freeze its five accounts holding $16.3 million is baseless. On the other hand, CIBC took the action of freezing the five accounts after they were unable to identify the owners of the five accounts. According to the bank 388 users deposited cash in the five accounts amounting to $51.8 million from December 4, 2017, to February 20 2018. Later on, withdrawals were made leaving 21.6 million in the accounts. From the account’s activity, it’s difficult to pinpoint the real owner of the accounts between Custodian Inc. its owner Jose Reyes and the 388 users.

But in court QuadrigaCX claimed they are the owners of a considerable amount of the money and the bank mistakenly froze its accounts. On the other hand, the bank urged the court to withhold the funds until the real owners are identified. With that, Judge Hainey ruled in favor of CIBC and now per the ruling made CIBC has to transfer $19.6 million to the Superior Court accountant. For now, the disputed funds are under the court’s custody until court proceedings come to an end.

On the bank’s decision of freezing the accounts the judge had this to say;

“Although the respondents allege that CIBC froze its accounts wrongfully, I’m not in any position on this record to issue a ruling concerning the bank’s decision. Therefore I will not issue an order requested in para 2 of CIBC draft order.”

Whiles issuing his comment to local news outlet Globe and Mail cornering Judge Haiye decision Gerald Cotton CEO of QuadrigaCX had this to say;

“With the court not making a ruling on whether CIBC action of freezing our funds was appropriate, we are going back to the drawing board to consider our next steps.”

With the court’s decision to withhold the funds until the proceedings come to an end QuadrigaCX customers are on the receiving end of not been able to make any transactions. QuadrigaCX is the first exchange to get a license from Financial Transitions and Reports Analysis Center and is based in Vancouver.