Forfeiture of Cash and Gold
The Supreme Court of British Columbia has ordered the forfeiture of $1 million in cash and gold assets associated with Michael Patryn, a co-founder of the now-defunct cryptocurrency exchange QuadrigaCX. As Patryn did not contest the forfeiture proceedings, the province of British Columbia has successfully claimed the assets. These assets include 45 gold bars, several luxury watches, and a quarter million dollars in cash that was seized under an Unexplained Wealth Order.
This forfeiture decision paves the way for the government to liquidate Patryn’s seized possessions, as reported by the Vancouver Sun.
RCMP Seizure and Provincial Lawsuit
In June 2021, the Royal Canadian Mounted Police executed a search warrant at a safety deposit box belonging to Michael Patryn in downtown Vancouver. During the search, police recovered $250,200 in Canadian currency, which was found to be separated into five bundles, each containing approximately $50,000.
In addition to the cash, the deposit box contained a variety of valuable items. These included three one-kilogram gold bars, 12 one-ounce gold bars, 10 small Australian gold bars, and 20 gold bars of unlisted sizes from the Canadian Mint. The seized luxury items encompassed two Rolex DateJust watches, one of which was adorned with diamonds, a Chanel J12 Black Diamond watch, a Baume & Mercier Men’s Clasima Executive watch, three rings, two cufflinks, a pendant, and a necklace.
Furthermore, RCMP officials discovered personal documents such as birth certificates, name change certificates, credit cards, and cheques made out to several individuals affiliated with Patryn. A Ruger 1911 .45 calibre pistol with ammunition was also found among the seized items.
In 2023, the province initiated a civil forfeiture lawsuit, alleging that Patryn had misappropriated client funds to acquire and maintain the contents of the safety deposit box. The government contended that he had used QuadrigaCX customer money for his personal benefit.
Patryn responded in 2024, denying the plaintiffs' claims that the cash, gold, watches, and jewelry were the proceeds of unlawful activity. Subsequently, British Columbia invoked a new provincial law, compelling Patryn to explain the origins of his wealth and informing the court that Patryn had stolen from QuadrigaCX creditors.
The co-founder challenged these allegations on constitutional grounds, asserting that they violated his Charter rights. However, he did not defend the case when the province moved forward with seizing the property. He later formally withdrew his response, allowing the BC Civil Forfeiture Office to apply for judgment.
Background: QuadrigaCX and Gerald Cotten's Death
QuadrigaCX was co-founded by Michael Patryn and Gerald Cotten. Cotten died unexpectedly in December 2018 while traveling in India. He was reportedly the sole individual with access to the private keys necessary to retrieve customer funds from the exchange.
Following Cotten's death, an investigation by the Ontario Securities Commission revealed that a significant portion of the funds had already been lost. These losses were attributed to unsuccessful cryptocurrency trades, including Bitcoin, and to Cotten funding a "lavish" personal lifestyle.
The regulator stated that by 2016, QuadrigaCX had effectively operated as a Ponzi scheme, using funds from new investors to process withdrawals for earlier investors. The collapse of the cryptocurrency exchange left over 76,000 unsecured creditors with claims totaling $214.6 million—$74.1 million in cash and $140.5 million in digital currency.
In 2019, the Toronto-based law firm Miller Thomson LLP requested the RCMP’s Commercial Crimes Branch to conduct an exhumation and autopsy to confirm Gerald Cotten's identity and cause of death. The request specified the completion of the exhumation process by spring 2020 to ascertain if "Mr. Cotten is in fact deceased."
Jennifer Robertson, Cotten's widow, expressed her heartbreak over the exhumation request in an emailed statement to reporters.
Michael Patryn, who has also used the names Michael Dhanani, Omar Dhanani, and Omar Patryn, has a documented criminal history. In 2005, he was convicted in the United States for conspiracy to transfer identification documents with the intent to engage in online money laundering. After serving an 18-month prison sentence, he was deported to Canada.
Patryn's past offenses include 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 department also noted that his common-law spouse, Lovie Horner, had deposited money into his bank account between 2014 and 2020.