Case of defunct QuadrigaCX cryptocurrency exchange could shift to Toronto court

Interested parties attend Nova Scotia Supreme Court as Canada's largest cryptocurrency exchange seeks creditor protection in the wake of the sudden death of its founder and chief executive in December and missing cryptocurrency worth roughly $190-million, in Halifax on Tuesday, Feb. 5, 2019. (THE CANADIAN PRESS/Andrew Vaughan)

HALIFAX -- The accounting firm investigating the multimillion-dollar implosion of the QuadrigaCX cryptocurrency exchange wants to move the ongoing bankruptcy proceedings from Halifax to Toronto.

Ernst and Young has asked a Nova Scotia Supreme Court judge for the change in jurisdictions because the involvement of four law enforcement agencies and regulators has added to the complexity of a case that is now focused on parties in Ontario.

Both the FBI and the RCMP's financial crime division in Milton, Ont., have confirmed they are investigating the downfall of QuadrigaCX, which was one of Canada's largest cryptocurrency exchanges when it collapsed in January.

Acting as bankruptcy trustee, Ernst and Young says the move would result in cost savings because most of the professionals involved in the case are now in Ontario, where multiple court appearances are anticipated.

The transfer request, which has the support of QuadrigaCX's affected users, comes less than two months after Ernst and Young accused the company's late founder, Gerald Cotten, of creating fake trades and transferring customer funds into his personal accounts.

Cotten, who ran the exchange from his home outside of Halifax, died suddenly in December while travelling in India.

At the time, the Vancouver-based company owed creditors more than $200 million in cash and digital assets, only a small portion of which has been recovered.