Canada Judge Rules in Favour of CIBC Bank in Dispute With Crypto Exchange

On Oct. 8, Canadian newspaper the Globe and Mail reported that Vancouver-based QuadrigaCX had been experiencing difficulties accessing $16.3 million of its funds since January, when CIBC froze five accounts belonging to the exchange’s payment processor, Costodian Inc., and its owner, Jose Reyes. The bank purportedly froze the accounts due to an inability to identify the funds’ owners.

CIBC subsequently requested the court to withhold the disputed funds and decide whether they belong to QuadrigaCX, Costodian, or the 388 users who had deposited the funds. In response, QuadrigaCX told the court that the bank froze the funds mistakenly and claimed to be the undisputed owner of the greater part of the funds.

A $19.6 million disputed sum between Canada’s largest crypto exchange QuadrigaCX and the Canadian Imperial Bank of Commerce (CIBC) has been handed into the custody of the Ontario Superior Court, per a court document filed Nov. 9.

How Judge Rules in Favor of Canadian Bank in Dispute With Crypto Exchange

In the recent court file, Judge Glenn Hainey of the Ontario Superior Court ruled in favor of the bank, agreeing that the owner of the funds is not clearly established. Per the ruling, CIBC now has to pass the funds over to the Accountant of the Superior Court, so the court can identify the owner of the money.

Regarding the legitimacy of CIBC’s actions in freezing the accounts, Judge Hainey concluded that he is “not in a position on this record to make any determination as to CIBC’s possible liability for doing so,” adding:

“Accordingly, it would be inappropriate for me to extinguish any liability that CIBC may have for freezing the accounts in the absence of an evidentiary record that establishes that CIBC has no liability.”

ALSO READ: Google G Suite Twitter Account Hacked to Promote 10,000 Bitcoin Scam

Gerald Cotten, chief executive at QuadrigaCX, told the Globe and Mail that “more importantly, the court has made no ruling yet on whether CIBC acted appropriately in freezing the funds in the first place. Regarding this point, we are considering our next steps.”

We also learnt that lawyers representing payment startup Ripple in its ongoing securities lawsuit are trying to move the case to a U.S. federal court. Court records confirm the application to move the case from the state to federal level, which would allow Ripple to prove definitively that its XRP token is not a security under U.S. law, should it win.

The lawsuit against Ripple Labs was originally filed in May by law firm Taylor-Copeland for the sale of unregistered securities. The claimants all lost money from purchasing XRP at high prices earlier this year, but opted to sue to include all possible parties affected since 2013.

Since the Judge has Ruled in Favour of CIBC Bank in Dispute With Crypto Exchange, what do you think will happen, will they refund the money back or what? 

ADS