British Columbia has secured a default judgment allowing authorities to seize over $1 million in cash and gold from QuadrigaCX co-founder Michael Patryn. The forfeiture marks another chapter in the ongoing legal saga surrounding one of cryptocurrency's most notorious exchange collapses, which left thousands of investors unable to access their funds.
A Canadian court has granted the province of British Columbia the right to seize approximately $1 million in assets belonging to Michael Patryn, co-founder of the now-defunct cryptocurrency exchange QuadrigaCX, following his failure to respond to civil forfeiture proceedings.
The default judgment includes both cash holdings and physical gold that authorities connected to Patryn, who helped establish QuadrigaCX before departing the company in 2016. The civil forfeiture action represents British Columbia's continued efforts to recover assets linked to the exchange's controversial operations and ultimate collapse.
QuadrigaCX became one of the cryptocurrency industry's most infamous failures when it imploded in 2019, leaving approximately 76,000 creditors unable to access around $215 million CAD in cryptocurrency and fiat currency. The exchange's downfall began after founder Gerald Cotten reportedly died during a trip to India in December 2018, allegedly taking the passwords to the platform's cold wallets with him.
Patryn, whose legal name is Omar Dhanani, has a controversial background that includes a prior fraud conviction in the United States. His involvement in QuadrigaCX's early days has been scrutinized by investigators and creditors seeking to understand how the exchange operated and where missing funds may have gone.
The default judgment against Patryn suggests he chose not to contest the civil forfeiture proceedings, though the reasons for his non-response remain unclear. British Columbia's Civil Forfeiture Office has been aggressive in pursuing assets connected to unlawful activity, and this case demonstrates the long reach of authorities even years after QuadrigaCX's collapse.
This development comes as cryptocurrency regulation continues to evolve in Canada and globally, with the QuadrigaCX disaster serving as a cautionary tale that has influenced policy discussions. The exchange's failure highlighted the risks of centralized custody, inadequate corporate governance, and insufficient regulatory oversight in the digital asset space.
For the thousands of creditors still seeking compensation through bankruptcy proceedings, the seizure of additional assets may offer modest hope, though the amount pales in comparison to the total losses suffered by QuadrigaCX users. The case remains a stark reminder of the importance of due diligence when selecting cryptocurrency platforms and the potential consequences of inadequate security practices.