British Columbia court seizes $1 million in cash and gold from QuadrigaCX co-founder

Key points:

• The province of British Columbia has obtained an order to seize $1 million in cash, gold, and valuables linked to the co-founder of QuadrigaCX.
• Patryn did not contest the claim, allowing the court to rule in his absence.
• The confiscation could pave the way for consideration of returning some of the assets to the creditors of the bankrupt exchange.

The British Columbia Supreme Court has ordered the confiscation of approximately $1 million in cash, gold bars, watches, and jewelry linked to Michael Patryn, co-founder of the bankrupt crypto exchange QuadrigaCX, in favor of the province. Patryn did not defend the lawsuit, which allowed for a default judgment.

The case concerns the contents of a bank safe deposit box and CIBC account: 45 gold bars, more than $250 000 in cash, expensive watches (Rolex, Chanel, Baume & Mercier), and jewelry. All of this was seized under the Unaccountable Wealth Order, a new mechanism for combating money laundering.

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Application of the law on unexplained wealth

The investigation indicated that Patryn used QuadrigaCX customer funds for personal enrichment and to finance luxury purchases. This became the basis for the demand to explain the origin of the assets. But after filing an initial response in 2024, Patryn withdrew his position without providing evidence of the legality of the funds.

The court ultimately transferred the property to the province. In addition to valuables, Patryn had a Ruger 1911 pistol with ammunition, documents in the name of Michael Patryn, and his former IDs associated with the names Omar Dhanani and Omar Patryn seized.

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The QuadrigaCX case history

QuadrigaCX collapsed in 2019 after the death of CEO Gerald Cotten. It was reported that he was the only one who had access keys to the funds. It later emerged that client assets had been lost long before his death: used in risky trades or withdrawn for personal use. According to the Ontario Securities Commission, by 2016, the platform had effectively become a Ponzi scheme.

The court ruling could form the basis for a separate lawsuit to determine whether it is possible to send part of the confiscated funds to thousands of QuadrigaCX creditors. As part of the bankruptcy, they received only 13 cents for every dollar lost on the exchange.