Canadian Authorities Question QuadrigaCX Co-Founder on Source of Funds

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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March 28, 2024 05:12 EDT

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Canadian authorities have filed a third “unexplained wealth order” application with the British Columbia Supreme Court targeting the co-founder of QuadrigaCX Michael Patryn to explain how assets were acquired.

QuadrigaCX filed for bankruptcy in Canada in 2018 after its CEO, Gerald Cotten, died under mysterious circumstances in India, taking the only known private keys to the exchange’s wallets with him. Although some of the funds owed to the exchange’s customers have been paid back, large amounts are still missing.

This latest unexplained wealth order application allows the Canadian authorities to take over assets linked to QuadrigaCX case.

“Today, we have filed our third unexplained wealth order application with the British Columbia Supreme Court – a strong demonstration of our government’s commitment to take decisive action against criminals and organized crime,” said Mike Farnworth, Minister of Public Safety and Solicitor General for British Columbia, in a statement.

The QuadrigaCX case has been much publicized in recent years, and was the subject of a popular 2022 Netflix documentary.

Cash, Gold Bars, Rolex Watches Seized

The order will allow the forfeiture of $250,200 in cash, 45 gold bars, four luxury watches and a number of pieces of expensive jewelry contained in a safety deposit box belonging to QuadrigaCX co-founder Patryn.

“The international, criminal actions of Quadriga Coin Exchange (QuadrigaCX) led to thousands of people losing their life savings,” said Farnworth.

“While the fallout of cryptocurrency theft that leaves many victims in its wake is topical, what is even more timely is the recovery of these ill-gotten funds and converting them to community benefits in a public way,” said Farnworth.

Proceeds From Crime Redirected to Victims

The Canadian official went on to stress that authorities will continue to take the assets from unlawful activity and redirect those proceeds made from crime to much-needed victim services programs and crime prevention initiatives, such as the anti-hate grants to communities announced on Feb. 15, 2024.

“Gold bars may be highly liquid and flashy luxury goods, such as jewelry and Rolex watches, attract attention, but they are also attracting the attention of police and our government. If they are the proceeds of criminal activity like fraud, drug trafficking or money laundering, we will go after them,” said Farnworth.