Crypto vs Banking: Canadian Exchange QuadrigaCX Challenges Bank Over Frozen Funds

By Sumedha Bose

QuadrigaCX, one of Canada’s largest cryptocurrency exchanges, based in Vancouver, has been fighting a rather controversial and difficult battle of late. The Canadian Imperial Bank of Commerce (CIBC) has since January 2018, frozen almost CA$28 million of its funds. The bank has also frozen several accounts of Quadriga’s payment processor which has provoked the rage of the exchange..

Why were the accounts frozen?

According to popular speculation, CIBC was unable to determine who the real owner of the funds was. This is why they handed over the responsibility of possession to the court. Meanwhile it has also requested for a pronouncement declaring the rightful owners of the funds between the payment processor, Quadriga, and the 388 depositors who paid money to the exchange for cryptocurrencies. Quadriga claims its authority over a large chunk of the funds and hence find it inappropriate for the bank to freeze the account.

How did the legal battle unfold?

Quadriga was prompt to respond in court and immediately urged the court, not to believe CIBC’s claims that there is something fishy about the transactions. The trade platform claims that the charges levied against them are unverified at best and untrue worst. Margaret Waddell, Quadriga’s lawyer says that the judge had already made up his mind about which way the final hearing will go.

Is this an attack on crypto by the traditional banking industry?

Quadriga has countered CIBC’s allegations with few of their own. According to them, it’s a coordinated attack against the rising growth of crypto in the country. They claim that the act of freezing these funds was incorrect and unjustified to begin with but CIBC is allegedly prolonging this just to save face and rationalize their actions. An email has been sent out to all of Quadriga’s customers with the information that Canadian banks are conspiring to stifle Quadriga by restricting its access to funds.

Bitcoin ownership has been on the rise in Canada and this fierce lawsuit comes at a time when crypto is gaining major popularity in the country. Some are viewing this battle as a head to head challenge between crypto and the traditional banking sector. What do you think?