In early 2019, crypto exchange QuadrigaCX collapsed following the death of its founder, Gerald Cotten. As the company executives claimed, Cotten was the only person who had access to accounts, and it could not return any customer funds after his death; that is how the crypto exchange ceased operations.
However, the real story was a bit different from what the company claimed. The Ontario Securities Commission (OSC) found out that QuadrigaCX collapsed as the deceased Gerald Cotten allegedly carried out a fraud by misusing client assets.
Now, Canada’s British Columbia court announced a forfeiture of $1 million in cash, gold, and luxury items tied to Michael Patryn, co-founder of the QuadrigaCX exchange. The $1 million worth of valuable assets is confiscated and given to the government of the province.
Forfeiture is a legal term that defines the process of seizing property due to its connection with unlawful activity.
Why British Columbia court forfeited $1 million in assets to the government?
The Supreme Court of British Columbia issued the order because the QuadrigaCX co-founder, Michael Patryn, refused to challenge the case. In such contexts, the provincial government has the right to take ownership of the captured assets and sell them off.
According to a media outlet, the fortified assets include $250,000 in cash, 45 gold bars, and luxury watches. These assets are reportedly described as connected to Patryn because investigators found them in premises connected to him.
It is worth noting that the Royal Canadian Mounted Police seized the assets from a safety deposit box in June 2021. After four years of legal proceedings, the court ordered that it forfeit the assets to the government in a default judgment.
Crypto faces similar examples of forfeitures
In crypto, similar forfeiture incidents have happened, although not as the same method used in the case of QuadrigaCX. When Sam Bankman-Fried’s FTX collapsed in 2022 due to alleged fraud, a US federal court ordered a forfeiture of nearly $11 billion.
In June 2025, the US Department of Justice (DOJ) submitted a civil forfeiture lawsuit to the Columbia district court targeting over $225.3 million in crypto assets. The DOJ noted that these funds were involved in crypto investment frauds.
