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The Criminal Past of Quadriga’s Co-Founder Has Been Revealed

Last Updated March 4, 2021 3:51 PM
Chris Chiddle
Last Updated March 4, 2021 3:51 PM

The mystery surrounding the disappearance of $190 million in crypto from Canadian exchange Quadriga deepened as it was revealed the surviving founder is a reported ex-con who served 18 months in a federal U.S. prison for identity theft, bank fraud and credit card fraud.

Michael Patryn, who founded Quadriga with Gerald Cotten, has been revealed as  Omar Dhanani. After denying this and disputing reports linking him to his criminal past, records were obtained showing that Patryn legally changed his name twice, six years before he founded Quadriga with Cotten.

Patryn has refused to comment on his criminal past or his identity, which he changed  from Omar Dhanani to Omar Patryn in 2003. He later changing his name to Michael Patryn in 2008. Both changes occurred within the province of British Columbia, Canada.

A Dark Cloud Hovers Above

Cotten died at age 30 last December in Jaipur, India due to complications from Crohn’s Disease. The event plunged Quadriga into chaos, as he was reportedly the only person holding the private keys to access the exchange’s $190 million in customer assets.

The news sent shockwaves across the crypto space. 115,000 people were unable to withdraw funds they’d deposited with the exchange, including one man who lost his $422,000 life savings.

Criminal Past

Dhanani has pleaded guilty to a range of crimes in the U.S., including conspiracy to commit credit and bank card fraud at age 22 in 2005. This was allegedly for the now terminated shadowcrew.com site that offered a marketplace for 1.5 million stolen bank and credit card numbers. He also pleaded guilty in 2007 to separate charges of burglary, grand larceny and computer fraud.

The crimes led to his deportation to Canada, where he changed his identity, reinvented himself as a cryptocurrency and bitcoin entrepreneur, and helped Cotten establish QuadrigaCX, one of the country’s first crypto exchanges.

Patryn said he left the company after a “fundamental disagreement” over a decision by Cotten to stop the listing of Quadriga.

In an earlier email exchange with Bloomberg, Patryn said:

On the day of our disagreement, I left the company and ceased being privy to operational decisions. Since that time, I have not been involved in the operations or management of any of the Quadriga companies.

He added that he and Cotten had not worked closely together since he left, and that he was unaware of his death:

I spoke with him in November when he sent me a message on my birthday. I did not know that he was married or in India until the official announcement of his death.

Where Did Everything Go?

The news of Quadriga’s collapse surfaced after customer withdrawal requests were ignored, and it was revealed the company had declared itself insolvent. Customers claim Quadriga faked Cotton’s death to steal from their cold wallet reserves.

Administrators from Ernst and Young were appointed to track down the missing assets. Victims of the collapse have instructed lawyers to represent them in Quadriga’s ongoing creditor protection proceedings in the Supreme Court of Nova Scotia.

The court has given Quadriga a 45-day extension to search for the missing crypto assets. The next hearing will take place on April 18 at 9:30 a.m.