Canada confiscates $1 million worth of assets from QuadrigaCX co-founder, setting major precedent for "Unexplained Wealth Orders"

The Supreme Court of British Columbia, Canada, has approved the forfeiture of cash and gold worth approximately $1 million linked to QuadrigaCX co-founder Michael Patryn, transferring ownership to the provincial government. This action is considered the largest and most consequential enforcement operation to date under the province’s Unexplained Wealth Order (UWO) framework, highlighting the region’s stringent crackdown on money laundering and unexplained assets.

According to the Vancouver Sun, Patryn did not contest the forfeiture order, allowing the court to proceed with liquidating the previously seized assets. These assets include 45 gold bars, luxury watches, jewelry, and over $250,000 in cash. Court documents state that the civil forfeiture ruling will officially take effect in September 2025, granting British Columbia full ownership of the assets seized in March 2024.

The Unexplained Wealth Order is a key new enforcement tool in British Columbia’s anti-money laundering initiative, allowing the government to require individuals to explain assets that clearly exceed their lawful income. The court found that Patryn was deeply involved in QuadrigaCX’s key operations, including misappropriation of client funds and mismanagement, providing sufficient grounds for asset forfeiture. In the next phase, the government may require Patryn to explain the source of his wealth, further advancing the investigation.

Patryn had previously challenged the asset seizure, citing alleged violations of constitutional rights and claiming the investigation breached the Charter of Rights, but he did not appear in court to contest the formal forfeiture proceedings.

QuadrigaCX collapsed in 2019 after its CEO, Gerald Cotten, died suddenly, with a significant amount of customer funds found missing, triggering one of the largest scandals in Canadian crypto history. Subsequent investigations revealed Patryn’s deep involvement in key decision-making and misappropriation of funds during the exchange’s operation.

This asset forfeiture paves the way for the next phase, as the British Columbia government will initiate an independent process to determine whether the recovered assets can be returned to QuadrigaCX’s creditors. The exchange’s bankruptcy proceedings concluded in 2023, with claimants ultimately receiving only 13 cents on the dollar, making any recovered funds especially important for victims.

This ruling is not only a milestone in the QuadrigaCX case but also underscores Canada’s increasing regulatory efforts in combating financial crimes related to crypto assets. (CoinDesk)