B.C. Increases Quadriga CX Crypto Scandal Asset Seizure

In its investigation into the infamous Quadriga CX cryptocurrency exchange fraud, the government of British Columbia has made a big step forward in its pursuit of assets connected to the affair

 Michael Patryn, a former co-founder of the exchange that has since been discontinued, has been the subject of an unexplained wealth order that was issued by the Civil Forfeiture Office of the province.

The injunction attempts to compel Patryn to provide an explanation for the origin of a cache of cash, gold bars, and luxury items that were confiscated by officials in 2021. Among the items that were seized was a Rolex watch that was adorned with diamonds.

It has been stated by the Minister of Public Safety, Mike Farnworth, that the assets in question consist of a total of 45 gold bars and a cash amount of $250,000. There is a possibility that the province will take possession of these assets if Patryn is unable to provide an explanation that is adequate regarding how they were obtained.

In 2019, the untimely death of the CEO of the exchange, Gerald Cotten, was the catalyst for the unfolding of the Quadriga CX tragedy, which has attracted international attention and served as the inspiration for a recent episode of a television crime thriller. 

There were thousands of clients who were unable to access their bitcoin holdings, which were believed to be worth approximately $200 million at the time of his death.

The Ontario Securities Commission conducted a following investigation, which led to the conclusion that Cotten had participated in "old-fashioned fraud" that was comparable to a Ponzi scheme. This fraud consisted of abusing client assets for a period of years without sufficient oversight or internal controls.

Court documents mention chat records from 2014 and 2015 that imply that Patryn, also known as Omar Dhanani and Michael Dhanani, and Cotten discussed stealing customer assets and staging Patryn's public exit from the exchange while remaining active secretly. This occurred despite the fact that Patryn parted relations with Quadriga CX in 2016.

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