British Columbia seizes $1M in assets tied to QuadrigaCX co-founder

Former QuadrigaCX co-founder Michael Patryn loses $1M in seized gold, cash, and luxury goods after British Columbia invokes unexplained wealth order powers.

British Columbia authorities have seized cash, gold and luxury items valued at approximately $1 million tied to QuadrigaCX co-founder Michael Patryn under the province’s unexplained wealth order regime, according to court documents.

The Supreme Court of British Columbia granted the forfeiture after Patryn chose not to contest the action, according to court filings. The seizure includes 45 gold bars, multiple high-end watches and cash originally recovered during an RCMP investigation.

Police discovered the items in a CIBC safety deposit box in Vancouver in 2021, including three one-kilogram gold bars and 42 smaller bars, according to court records. Officers also recovered Rolex and Chanel watches, rings, jewelry, identification documents, and a Ruger 1911 .45-caliber pistol with loaded magazines.

QuadrigaCX seizures begin in British Columbia

The civil forfeiture office alleged the assets were purchased using QuadrigaCX customer funds that were misappropriated during the years leading up to the exchange’s collapse, according to court filings.

The unexplained wealth order required Patryn to demonstrate legitimate sources for the assets. While he initially challenged the investigation on constitutional grounds, he ultimately withdrew his response and did not appear when the province sought judgment, court documents show.

QuadrigaCX, once Canada‘s largest cryptocurrency exchange, collapsed in 2019 after CEO Gerald Cotten died in India. Regulators later determined that customer assets were missing and concluded that the platform had effectively become a Ponzi scheme by 2016, with new deposits used to fulfill withdrawal requests while Cotten allegedly siphoned funds to finance personal expenses.

Investigators have alleged that Patryn, also known by several aliases including Omar Dhanani, played a central role in the exchange’s operations and benefited from client funds, according to court filings.

Court documents cited Patryn’s criminal history. In 2005, under the name Omar Dhanani, he was convicted in the United States for operating an online identity-theft and money-laundering service and later deported to Canada, according to records.

The province will conduct a separate review to determine whether any of the recovered assets can be directed to compensate QuadrigaCX creditors, according to authorities. Claimants received only a small fraction of their losses when bankruptcy proceedings concluded in May 2023.

The civil forfeiture suit lists Patryn’s last known location as Thailand, according to court documents. His current whereabouts remain uncertain.

In 2023, QuadrigaCX announced plans to begin interim distribution of funds to creditors, despite only a fraction of the missing funds being recovered, according to the exchange’s bankruptcy administrators.