British Columbia Seizes Over $1 Million Linked to QuadrigaCX Co-Founder

British Columbia has achieved a significant milestone under its unexplained wealth order (UWO) framework by successfully seizing over $1 million in cash, gold, and luxury items associated with Michael Patryn, a co-founder of QuadrigaCX.

Key Takeaways:

British Columbia has seized more than $1 million in cash, gold, and luxury items tied to Michael Patryn, co-founder of QuadrigaCX.
Authorities discovered 45 gold bars, expensive watches, and a loaded pistol in Patryn’s safety deposit box.
The seized assets are believed to be linked to funds misappropriated from QuadrigaCX customers.

The Supreme Court of British Columbia authorized the forfeiture after Patryn opted not to contest the case, allowing authorities to liquidate 45 gold bars, several luxury watches, and approximately $250,000 in cash that were originally confiscated during an RCMP investigation.

This order represents a key use of the province’s anti-money laundering measures.

British Columbia Seizes $1M in Cash and Gold Linked to QuadrigaCX Co-Founder

Contents of Patryn’s Safety Deposit Box

Court documents reveal that the confiscated items were located in a CIBC safety deposit box in Vancouver in 2021. This included three one-kilogram gold bars and 42 smaller bars.

Additionally, law enforcement officers recovered luxury items, including Rolex and Chanel watches, rings, jewelry, as well as identification documents, and even a Ruger 1911 .45-caliber pistol with loaded magazines.

At current gold prices, the value of the gold alone exceeds $800,000.

The civil forfeiture office contends that these assets were acquired using misappropriated customer funds from QuadrigaCX, which went missing in the lead-up to the exchange's notorious collapse.

While the unexplained wealth order required Patryn to prove the legitimacy of his assets’ sources, he initially challenged the investigation constitutionally but later withdrew his response and did not appear in court for the judgment.

QuadrigaCX’s Downfall and Its Impact

QuadrigaCX, once Canada’s largest cryptocurrency exchange, collapsed in 2019 following the death of its CEO, Gerald Cotten, in India. The exchange revealed that over $169 million in customer assets had vanished.

Regulators later determined that by 2016, the platform had essentially become a Ponzi scheme, utilizing new deposits to fulfill withdrawal requests while Cotten purportedly misused funds for personal expenses.

Revelations About Patryn’s Criminal History

Investigators have long alleged that Patryn, who is also known by aliases like Omar Dhanani, played a pivotal role in the operations of the exchange and profited from customer funds.

His criminal record was referenced in the forfeiture filings. In 2005, under the name Omar Dhanani, he was convicted in the U.S. for running an online identity theft and money laundering service, which led to his deportation to Canada.

This recent victory for the province will prompt a separate review to assess whether any of the recovered assets can be utilized to compensate QuadrigaCX creditors.

Claimants received only 13 cents on the dollar when the bankruptcy proceedings concluded in May 2023.

Patryn's current whereabouts remain unclear; however, the civil forfeiture suit indicates that his last known location was in Thailand.

In 2023, QuadrigaCX announced plans for an “interim distribution” of funds to creditors, even though only a small portion of the missing funds has been retrieved.