The British Columbia government has taken a significant step in its pursuit of assets linked to the infamous Quadriga CX cryptocurrency exchange scandal. The province’s Civil Forfeiture Office has filed an unexplained wealth order against Michael Patryn, a former co-founder of the now-defunct exchange.
The order seeks to compel Patryn to explain the origin of a stash of cash, gold bars, and luxury items, including a diamond-studded Rolex watch, seized by authorities in 2021.
According to Public Safety Minister Mike Farnworth, the assets in question include $250,000 in cash and 45 gold bars. If Patryn fails to provide a satisfactory explanation for how these assets were acquired, the province could move to seize them.
The Quadriga CX saga, which garnered international attention and inspired a recent TV crime drama episode, unfolded in 2019 when the exchange’s CEO, Gerald Cotten, died unexpectedly. His death left thousands of customers unable to access their cryptocurrency holdings, worth an estimated $200 million at the time.
A subsequent investigation by the Ontario Securities Commission concluded that Cotten had engaged in “old-fashioned fraud” akin to a Ponzi scheme, misusing client assets for years without proper oversight or internal controls.
While Patryn, also known as Omar Dhanani and Michael Dhanani, parted ways with Quadriga CX in 2016, court documents cite chat records from 2014 and 2015 that suggest he and Cotten discussed stealing customer funds and staging Patryn’s public exit from the exchange while remaining involved privately.