{"id":237795,"date":"2019-09-18T13:23:30","date_gmt":"2019-09-18T17:23:30","guid":{"rendered":"http:\/\/insidebitcoins.com\/?p=237795"},"modified":"2023-08-03T15:15:12","modified_gmt":"2023-08-03T15:15:12","slug":"canadian-tax-authority-opens-inquiry-into-quadrigacx","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/canadian-tax-authority-opens-inquiry-into-quadrigacx","title":{"rendered":"Canadian Tax Authority Opens Inquiry into QuadrigaCX"},"content":{"rendered":"

The Canada Revenue Agency (CRA), the tax and revenue collection authority in Canada, is conducting an audit of the corporate tax returns submitted by QuadrigaCX, a now-defunct cryptocurrency exchange.\u00a0<\/span><\/p>\n

According to a\u00a0<\/span>report<\/span><\/a>\u00a0published by the Globe and Mail yesterday, the CRA has launched an extended inquiry into Quadriga, and is now seeking tax returns dating between October 1, 2015, and September 20, 2018.<\/span><\/p>\n

Quadriga has continued to stay in the spotlight ever since Gerald Cotten, its founder, and chief executive, died while on a holiday trip in India last year. As it turned out, Cotton was the only one who had access to the company\u2019s cold wallets. So, when he died, he took the cold wallet passwords- as well as about $150 million in customer funds- with him.<\/span><\/p>\n

The death of Quadriga\u2019s boss sent the company on a downward spiral that it most likely won\u2019t be able to recover from. Now, authorities seem to have noticed some red flags with its books as well.<\/span><\/p>\n

Ernst & Young (EY), the designated bankruptcy trustee assigned to the company, has described the CRAs request for information and documents as significant, while adding that they intend to cooperate fully with the tax authority.\u00a0<\/span><\/p>\n

Per Globe and Mail, a representative for the auditing firm stated, \u201cThe Trustee intends to discuss the request for information with CRA Audit and their counsel and will return to Court for further direction, if necessary.\u201d<\/span><\/p>\n

The entire ordeal has also dredged up some previously unknown information about Quadriga. Shortly after it was assigned to handle the exchange\u2019s bankruptcy proceedings, EY released a report showing that Quadriga had been operating a fraudulent business.\u00a0<\/span><\/p>\n

In its report, EY pointed out that the exchange didn\u2019t follow the basic business principles, didn\u2019t maintain any financial accounts, and engaged in gross fund mismanagement.<\/span><\/p>\n

Globe and Mail additionally reported that EY claimed this CRA inquiry could also have potential effects on their ability to settle the exchange\u2019s 115,000 creditors. However, given the fact that they don\u2019t have any legal basis for rebuffing the tax authority, they will need to move ahead nonetheless.\u00a0<\/span><\/p>\n

\u201cAccordingly, the Trustee is focused on conducting its document collection, organization, review and production efforts in as cost-effective a manner as possible […] it is not expected that the Trustee will be in a position to respond to the CRA Audit request at this time,\u201d the company reportedly said.<\/span><\/p>\n

Apart from the CRA, the Federal Bureau of Investigation (FBI) has also begun looking into the exchange as well. Back in June, the FBI published an announcement calling for former Quadriga users to provide information that could help it in its probe.<\/span><\/p>\n

\u201cIf you have questions or concerns about your QuadrigaCX account, or if you believe you are a victim, please complete the below questionnaire. […] Based on the responses provided, you may be contacted by the FBI and asked to provide additional information.\u201d<\/span><\/p>\n

The form asks users for their names, as well as whether they could still access their old transaction IDs and hot wallets. Questions also include the value of the funds\u2019 customers had in their accounts, as well as whether they provided any information or documents to the exchange.<\/span><\/p>\n

Read more:\u00a0<\/strong><\/p>\n