Canadian tax authority keen on getting one exchange's user data

The Canadian tax authority, the CRA (Canada Revenue Agency) recently filed a court document with the Ontario Superior Court of Justice. The document details a demand that one local crypto exchange surrenders its user information. The number of affected users is roughly 115,000 customers, and the exchange in question is QuadrigaCX.

QuadrigaCX trustee has agreed to provide the data

QuadrigaCX has had a very tough period last year. First, its founder, Gerry Cotten, passed away during a business trip to India. After that, it turned out that he was the only one who could access the exchange's wallets, and the funds stored within. Unable to access the money, the exchange quickly reached bankruptcy.

Now, the court-appointed bankruptcy trustee for the exchange, EY, got the order to provide all of Quadriga's user information to Canada's tax authority.

The court document in question says that: “The Trustee has advised CRA that its intention is to simply produce a copy of the full EDiscovery Database, redacted only for the privilege, in response to the CRA Production Demand." In other words, the trustee plans to comply with the order. It will surrender information belonging to internal and third-party sources.

This will include data such as account balances, detailed personal user info, and more. Further, the information will include everything that the exchange collected between 2016 and 2018.

Originally, there were some privacy concerns among the exchange's former users.

However. a legal firm representing Quadriga users, Miller Thomson, decided not to object to the request. In a recently published letter, the company said that the cost and delays of fighting the request would be too big. Also, it claims that "The official committee’s primary objective is to move the bankruptcy process towards a distribution expeditiously.”

The exchange had numerous legal issues in the past

While Quadriga's bankruptcy came only after its founder had passed away, the exchange had issues earlier, as well. In 2018, the Canadian Imperial Bank of Commerce froze 28 million CAD that the exchange held in five different accounts. In addition to that, Quadriga also partnered with Crypto Capital, which was a shadow banking firm.

This move also attracted a lot of negative publicity to the Canadian exchange. There was also no lack of customer complaints. Finally, Quadriga's strange practices made authorities unable to confirm to whom the frozen funds belonged. They could have been the customers, the exchange's own money, or Quadriga's payment processors.