British Columbia Seizes $1M in Assets Tied to QuadrigaCX Co-founder

Source: Cryptonews Original Title: British Columbia seizes $1M in assets tied to QuadrigaCX co-founder Original Link: https://crypto.news/british-columbia-seizes-1m-in-assets-tied-to-quadrigacx-co-founder/

Asset Seizure Details

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. The seizure includes 45 gold bars, multiple high-end watches and cash originally recovered during an investigation. Officers recovered three one-kilogram gold bars and 42 smaller bars, along with luxury watches, rings, jewelry, identification documents, and a firearm with loaded magazines from a safety deposit box in Vancouver in 2021.

Alleged Misappropriation of Customer Funds

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. 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.

Background on QuadrigaCX Collapse

QuadrigaCX, once a major cryptocurrency exchange in North America, 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. Court documents cited Patryn’s criminal history, noting that 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 was later deported.

Potential Creditor Compensation

The province will conduct a separate review to determine whether any of the recovered assets can be directed to compensate QuadrigaCX creditors. Claimants received only a small fraction of their losses when bankruptcy proceedings concluded in May 2023. In 2023, QuadrigaCX announced plans to begin interim distribution of funds to creditors, despite only a fraction of the missing funds being recovered.

Partryn’s last known location was listed as Thailand in court documents, and his current whereabouts remain uncertain.