Canadian law firm Miller Thomson has hired consultancy firm Kroll to perform blockchain analytics work in relation to the ongoing dissolution of QuadrigaCX, the exchange which failed last year after its CEO Gerald Cotten was reported to have died.
The firm, which represents the now-former users of Quadriga pursuant to a court order, announced the move in a notice to creditors Friday, adding that Kroll would work “with its strategic partner Coinfirm” to analyze a subset of transaction data. Miller Thomson began looking for an analytics firm at the beginning of the year.
“Since being founded in early 2016, Coinfirm has created a powerful analytics engine for blockchain tracing exercises,” the update said. “The Kroll/Coinfirm partnership will use a combination of professionals as needed with experience in cryptocurrency, asset tracing/searching, asset recovery, fraud investigations, and data analytics.”
The law firm will not share further details “due to confidentiality,” the document said, though it said Miller Thomson arrived at the decision in conjunction with the Official Committee, a group of users appointed by a Canadian court to act as a sort of liaison between the law firm and the broader group of former customers.
Miller Thomson was likewise appointed to represent Quadriga’s former customers last year, alongside Ernst and Young (EY), which is acting as a bankruptcy trustee and has been tasked with identifying and securing any of Quadriga’s funds to disburse back to its former customers. So far, about $46 million CAD (around $35 million U.S.) has been recovered, according to the Ontario Securities Commission, far short of the nearly $200 million customers are supposedly owed.
Kroll will receive a fee of $50,000 CAD ($38,000 U.S.) and is indemnified against any potential lawsuit up to $150,000 CAD ($114,000 U.S.).
Miller Thomson did not provide any other information about what users could expect in terms of fund distributions. The law firm did update Quadriga’s users about its research into Crypto Capital however, announcing it had “forwarded the information” it received from individuals to EY and found that Crypto Capital does not currently possess any of Quadriga’s holdings.
“Representative Counsel understands that based on the Trustee’s review of the information provided by Affected Users and information in its possession, there is currently insufficient evidence to establish that Crypto Capital owed any funds to Quadriga as of the date of bankruptcy,” the update said.
The update caps a brief investigation which began in January of this year, when Miller Thomson asked Quadriga’s users to share any information they had about the Panama-registered “shadow bank,” whose operators currently face a host of charges in the U.S. (one, Reginald Fowler, was arrested and is now awaiting trial).
Read more: 17,000 People Have Filed Claims for Refunds From QuadrigaCX, Auditor EY Says
At the time, Miller Thomson said it was looking into whether the payment processor held any of Quadriga’s funds due to the fact that Quadriga apparently maintained no corporate or accounting records, and therefore EY could not determine which companies held its funds.
While Quadriga’s customers may be hoping for a prompt payout of funds, it does not appear the legal process, which has stretched out 18 months so far, will end anytime soon. Miller Thomson noted it could not begin the process of disbursing funds until EY has finalized its record of who is owed what and the Canada Revenue Agency has completed its audit of the exchange.
“The most material impact on the speed of distribution will be the CRA’s audit of Quadriga’s tax liabilities,” Friday’s update said.
It does not currently have a timeline for when this audit might be completed.