QuadrigaCX

QuadrigaCX launched in December 2013 in Vancouver, founded by Gerald Cotten and Michael Patryn (Patryn was involved until 2016), and grew into Canada's largest cryptocurrency exchange. Cotten, 30, died on December 9, 2018 at a hospital in Jaipur, India, of complications from Crohn's disease, as the sole holder of the exchange's keys and passwords. The Nova Scotia Supreme Court granted Quadriga CCAA creditor protection on February 5, 2019, with Ernst & Young as monitor — the exchange owed roughly 76,000 users about C$215 million — and the companies were assigned into bankruptcy on April 15, 2019 with EY as trustee.

The Ontario Securities Commission's investigative report (June 11, 2020), based on 368,000+ client accounts and over 6 million transactions, called Quadriga "an old-fashioned fraud wrapped in modern technology." It found Cotten operated the platform like a Ponzi scheme: he opened alias accounts credited with fictitious currency and crypto balances, traded them against real client assets, and covered withdrawal shortfalls with other clients' deposits. Of at least C$169 million in client losses, roughly C$115 million arose from Cotten's fraudulent trading, and about C$24 million of client funds was transferred to Cotten and his spouse between 2016 and 2018. Quadriga was never registered with any securities regulator.

In bankruptcy, EY recovered only about C$46 million against 17,648 proven claims totaling C$303.1 million (~US$222 million, including the CRA's C$11.7 million tax claim). In May 2023 EY paid an interim distribution of 13 cents on the dollar, with crypto claims valued at April 15, 2019 prices (C$6,739.08/BTC). No one was criminally charged; Cotten is deceased.

Latest developments: British Columbia pursued co-founder Michael Patryn (aka Omar Dhanani, convicted in the US in 2005 for his role in the Shadowcrew identity-theft/money-laundering ring) under an unexplained wealth order, seizing about C$1 million in assets — $250,200 in cash plus 45 gold bars, four luxury watches and jewelry — from a CIBC safety deposit box in March 2024. In September 2025 the BC Supreme Court granted the province a default civil-forfeiture judgment after Patryn stopped contesting the case; a separate process will determine whether proceeds go to Quadriga's creditors.

Sources: [OSC report release (Jun 11, 2020)](https://www.newswire.ca/news-releases/osc-publishes-investigative-report-of-quadrigacx-871268566.html) · [OSC QuadrigaCX report](https://www.osc.ca/quadrigacxreport/) · [CoinDesk — OSC Ponzi finding (Jun 2020)](https://www.coindesk.com/markets/2020/06/11/quadriga-was-a-ponzi-scheme-ontario-securities-regulator-says) · [CoinDesk — 13% bankruptcy distribution (May 2023)](https://www.coindesk.com/business/2023/05/12/quadriga-cx-bankruptcy-claimants-to-get-13-on-the-dollar) · [CoinDesk — BC forfeiture of Patryn assets (Dec 2025)](https://www.coindesk.com/policy/2025/12/08/canadian-province-granted-forfeiture-of-quadrigacx-co-founder-s-assets-with-default-judgement)

**Official action:** OSC investigative report Jun 2020 (Ponzi finding); EY bankruptcy Apr 2019 with 13% distribution May 2023; BC Supreme Court civil forfeiture of co-founder Patryn's assets Sept 2025