The British Columbia Civil Forfeiture Office has taken action against Michael Patryn, co-founder of the now-defunct QuadrigaCX cryptocurrency exchange, by filing an unexplained wealth order (UWO) with the British Columbia Supreme Court.
This move aims to seize a substantial amount of assets, including $250,200 in cash, 45 gold bars, luxury watches, and other items found in a safety deposit box linked to Patryn.
TLDR
- British Columbia’s Civil Forfeiture Office has filed an unexplained wealth order (UWO) against QuadrigaCX co-founder Michael Patryn.
- The order aims to seize assets including $250,200 in cash, 45 gold bars, luxury watches, and other items found in a safety deposit box linked to Patryn.
- QuadrigaCX, once Canada’s largest cryptocurrency exchange, became insolvent in 2019 after the death of its other co-founder, Gerald Cotten.
- Patryn, who has a criminal record in the U.S., is alleged to have misappropriated customer funds and cryptocurrency during his involvement with QuadrigaCX.
- The case highlights the challenges of combating financial crime in the cryptocurrency industry and may set a precedent for addressing unexplained wealth.
QuadrigaCX, once the largest cryptocurrency exchange in Canada, became insolvent in February 2019, shortly after the death of its other co-founder,
Gerald Cotten, who allegedly took the private keys to the exchange’s offline storage systems to his grave. The controversy surrounding QuadrigaCX led to massive financial losses for its customers and has become the subject of intense media scrutiny.
According to documents submitted to the court, the assets in question are allegedly the proceeds of criminal activities linked to Patryn and Cotten.
Conversations between the two co-founders suggest plans to misappropriate customer funds as early as 2014.
The order contends that Patryn played a significant role in QuadrigaCX’s activities, including the misappropriation of funds, justifying the seizure of assets.
Patryn, who has a criminal record in the United States and was previously known as Omar Dhanani before two name changes, has contested the claim through his counsel, arguing that the goods seized were not acquired by unlawful means and that the investigation breached his constitutional rights.
The upcoming court decision on April 30 might result in the forfeiture of these assets if Patryn cannot demonstrate their legal acquisition.
The QuadrigaCX scandal highlights the global challenge of combating cryptocurrency fraud and the complexities of the industry. British Columbia’s use of the UWO, a relatively novel tool, demonstrates the government’s firm stance on fighting financial crime and money laundering.
This case, the third of its kind in the province, may set a precedent for addressing unexplained wealth and could boost efforts to break down organized crime’s financial networks in the cryptocurrency space.
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