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The Supreme Court of British Columbia has forfeited $1 million in cash and gold linked to Michael Patryn, co-founder of the defunct cryptocurrency exchange QuadrigaCX.
Since Patryn did not contest the forfeiture, British Columbia claimed the assets, which included 45 gold bars, luxury watches, and a quarter million dollars in cash seized under an Unexplained Wealth Order.
The forfeiture clears the way for the government to liquidate Patryn’s seized possessions, according to a Vancouver Sun report.
BC court allows province to sell QuadrigaCX assets after RCMP’s seizure
The Royal Canadian Mounted Police executed a search warrant at Patryn’s safety deposit box in downtown Vancouver in June 2021. The police recovered $250,200 in Canadian currency, separated into five bundles of approximately $50,000 each.
Aside from cash, the deposit box contained three one-kilogram gold bars, 12 one-ounce bars, 10 small Australian bars, and 20 bars of unlisted size from the Canadian Mint. Luxury items among the seized property included two Rolex DateJust watches, one adorned with diamonds, a Chanel J12 Black Diamond, a Baume & Mercier Men’s Clasima Executive watch, three rings, two cufflinks, a pendant, and a necklace.
RCMP Officials also found birth certificates, name change certificates, credit cards, cheques in several names affiliated with Patryn, and a Ruger 1911 .45 calibre pistol with ammunition.
In 2023, the province launched a civil forfeiture lawsuit claiming Patryn misappropriated client funds to acquire and hold onto the safety deposit box and its contents. The government had alleged he used QuadrigaCX customer money for personal benefit.
Patryn responded in 2024, denying any claims from plaintiffs that the cash, gold, watches, and jewelry were proceeds of unlawful activity. BC then invoked a new provincial law to demand Patryn explain the origins of his wealth, telling the court Patryn stole from QuadrigaCX creditors.
The co-founder blasted the allegations on constitutional grounds, saying it breached his Charter rights, but he did not defend the case when the province moved to seize the property. Later, he formally withdrew his response to allow the BC Civil Forfeiture Office to apply for judgment.
QuadrigaCX and Gerald Cotten’s death
QuadrigaCX was co-founded by Patryn and Gerald Cotten. Cotten died suddenly in December 2018 while traveling in India, leaving the world as the only person with access to the private keys needed to retrieve customer funds.
After Cotten’s demise, an Ontario Securities Commission investigation revealed that much of the funds had already been lost, either through unsuccessful cryptocurrency trades, including Bitcoin, or by Cotten funding a “lavish” lifestyle.
In 2016, the regulator said QuadrigaCX had effectively become a Ponzi scheme because it used new investor money to pay withdrawals to earlier investors. The crypto exchange’s collapse left more than 76,000 unsecured creditors claiming a total of $214.6 million; $74.1 million in cash and $140.5 million in digital currency.
Toronto-based law firm Miller Thomson LLP requested the RCMP’s Commercial Crimes Branch to conduct an autopsy to confirm both Cotten’s identity and cause of death in 2019. The letter asked for completion of the exhumation process by spring 2020 to find out if “Mr. Cotten is in fact deceased.”
Jennifer Robertson, Cotten’s widow, told reporters she was “heartbroken” over the exhumation request in an emailed statement.
Michael Patryn, also known as Michael Dhanani, Omar Dhanani, and Omar Patryn, has a criminal history. In 2005, he was convicted in the United States for conspiracy to transfer identification documents, intending to take part in online money laundering. After serving an 18-month jail sentence, he was deported to Canada.
Patryn’s offenses included theft, fraud, money laundering, falsifying documents, conspiracy, careless storage of a firearm, and possession of a firearm for a dangerous purpose. British Columbia’s justice arm also mentioned his common-law spouse, Lovie Horner, had deposited money in his bank account between 2014 and 2020.
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