Quadrigacx Co-Founder Compelled to Account for 45-Bar Gold Stash

March 30, 2024 Bitcoin.com

Five Years After CEO’s Sudden Death, Victims of QuadrigaCX Collapse To Receive 13% of Lost Funds

May 14, 2023 The Daily Hodl

QuadrigaCX creditors set to receive 13% of their claims as an ‘interim dividend’

May 13, 2023 Coin Telegraph

Coin Telegraph

The creditors will receive a monetary equivalent of the value of their lost crypto assets as April 15 2019.

Creditors of the bankrupt Canadian crypto exchange QuadrigaCX are set to receive 13% of their total claims as part of an “interim dividend.”

According to a May 12 notice to creditors from QuadrigaCX’s bankruptcy trustee Ernst & Young (EY), each “creditor with a proven claim will receive 13.094156% of their proven claim less the levy amount payable to the Office of the Superintendent of Bankruptcy pursuant to the BIA.”

“The interim dividend provides for a distribution of approximately 87.0% of the funds the Trustee is currently holding. The remaining funds will be held as a reserve for future disbursements related to the administration of the bankruptcy. A final distribution will be made at a later date,” EY added.

The notice indicates that there has been 305.6 million CDN ($223 million) worth of claims made by 17,648 creditors.

According to EY, 15,356 creditors are owed between $0 to $10,000, while 1,784 are owed between $10,000 and $49,999.

*Breakdown of value owed to creditors. Source: Ernst & Young*

Just 15 creditors are owed more than $1 million, with the Canada Revenue Agency owed 11.7 million CDN worth of back taxes from 2016 to 2018.

While former users of the exchange mostly held crypto assets at the time of the firm’s collapse in 2019, their claimed holdings were converted into the monetary value of the asset as of April 15 that year.

As such, if someone held 1 Bitcoin (BTC) at the time, they will eventually get back 6,739 CDN ($4,933), with 13% of that soon coming as an interim dividend.

*Crypto value as April 15 2019. Source: Ernst & Young*

It has not been specified when the interim dividends will be distributed, however Miller Thomson, the law firm representing the creditors, suggested on May 8 that it will happen over the next few weeks.

QuadrigaCX was one the largest crypto exchanges in Canada before it became insolvent in early 2019. Shortly after its co-founder and CEO, Gerald Cotten, died in India, taking the private keys to QuadrigaCX’s offline storage systems to his grave.

Magazine: Magazine: $3.4B of Bitcoin in a popcorn tin — The Silk Road hacker’s story

Bankrupt crypto exchange QuadrigaCX to start ‘interim distribution’ of funds

May 9, 2023 Coin Telegraph

Coin Telegraph

Despite their best efforts, bankruptcy trustees have only managed to recover a fraction of the $160 million ($215 million Canadian) owed to creditors.

According to a May 8 post by Miller Thomson, the law firm representing users of the defunct cryptocurrency exchange QuadrigaCX, interim distribution of funds tied to bankruptcy proceedings will be scheduled "in the coming weeks."

Bankruptcy trustee Ernest & Young announced the interim distribution in consultation with estate inspectors. In the near future, the trustee will post a Notice to Affected Users regarding details about the manner and procedure of the distribution. According to Miller Thomson, a small number of affected users are expected to receive a Notice of Disallowance of Claim, which means that the creditor's claim has been revised or disallowed in the bankruptcy process.

"If you received a Notice of Disallowance, you have the right to appeal the decision," Miller Thomson explained, adding:

"The first step is to review the reasons for the revision or disallowance and gather any necessary evidence to support their claim. In this case, the Trustee is most likely to have issued a Notice of Disallowance if there was a discrepancy in your proof of claim."

QuadrigaCX, once the largest cryptocurrency exchange in Canada, became insolvent in February 2019, shortly after its co-founder Gerald Cotten died in India, taking the private keys to QuadrigaCX's offline storage systems to his grave. According to the Ontario Securities Commission (OSC), QuadrigaCX owes its affected clients an estimated $160 million. In addition to losing access to cold storage, the OSC alleges that Cotten realized $86 million in crypto trading losses on the QuadrigaCX platform, which was then covered with users' funds.

Since then, bankruptcy trustee Ernest & Young has recovered $34.3 million worth of assets. "We did not identify any other assets beyond those identified by Ernst & Young," wrote the OSC.

*Distribution of funds located in QuadrigaCX bankruptcy proceedings with amounts in Canadian dollars. Source: OSC*

Magazine: Can you trust crypto exchanges after the collapse of FTX?

$1.7M in Quadrigacx Bitcoins Move, Court Trustee EY Says Transfers Were ‘Unauthorized’

December 21, 2022 Bitcoin.com

Five Bitcoin Wallets Linked to Collapsed Crypto Exchange Mysteriously Awaken After Years of Inactivity: On-Chain Data

December 21, 2022 The Daily Hodl

$1.7M of Bitcoin tied to QuadrigaCX reawakens after years of dormancy

December 20, 2022 Coin Telegraph

bankrupt

The wallets were thought to be inaccessible following the death of the exchange's founder in 2018, as he had sole responsibility for the wallet's private keys.

Five wallets tied to the defunct Canadian cryptocurrency exchange QuadrigaCX, previously thought to be inaccessible, have just been spotted moving around $1.7 million worth of Bitcoin after years of dormancy.

Crypto researcher ZachXBT alerted the crypto community in a Twitter post on Dec. 19, highlighting the five wallets have transferred around 104 Bitcoin (BTC) on Dec. 17 to various wallets.

Blockchain records show the wallets had not sent BTC since at least April 2018.

Five wallets attributed to QuadrigaCX unexpectedly moved ~104 BTC on Dec 17 for the first time in years.

1ECUQLuioJbFZAQchcZq9pggd4EwcpuANe
1J9Fqc3TicNoy1Y7tgmhQznWrP5AVLXj9R
1MhgmGaHwLAvvKVyFvy6zy9pRQFXaxwE9M
1HyYMMCdCcHnfjwMW2jE4cv9qVkVDFUzVa
1JPtxSGoekZfLQeYAWkbhBhkr2VEDADHZB
— ZachXBT (@zachxbt) December 19, 2022

Once Canada's largest crypto exchange, QuadrigaCX declared bankruptcy in Apr. 2019 following the Dec. 2018 death of its founder and CEO, Gerald Cotten, who was solely responsible for the private keys of the exchange's wallets.

155,000 exchange users are owed up to $200 million in cryptocurrencies at the time of its bankruptcy.

In Feb. 2019, a report from Big Four accounting firm Ernst & Young (EY) — the firm overseeing the exchange’s estate — stated that QuadrigaCX accidentally transferred around 103 BTC on Feb 6. 2019 to cold wallets in which only the late-Cotten had access to — almost identical to the amount to the Bitcoin that has just recently moved.

At the time, the firm said it would be working with management to retrieve the cryptocurrency from the cold wallets.

The mysterious death of QuadrigaCX’s founder and CEO followed by the collapse of the exchange had sparked conspiracy theories that the founder faked his own death as part of a fraudulent exit scam.

The story was the subject of a 2022 Netflix documentary.

In 2014, years before his death, Cotten said on a podcast that the best way to keep private keys was to print them off and store them offline in a safety deposit box and revealed the exchange stored its private keys offline in the company’s safety deposit box at a bank.

It’s unknown if the movement of the BTC is related to EY's recovery efforts. Cointelegraph contacted EY for comment but did not immediately receive a response.

DeFi lending protocol created by ex-QuadrigaCX co-founder surpassed $50M in TVL

September 26, 2022 Coin Telegraph

DeFi lending protocol created by ex-QuadrigaCX co-founder surpassed M in TVL

Coin Telegraph

Michael Patryn was doxed earlier this year for being the co-founder behind the DeFi project Wonderland, which collapsed shortly after.

According to DeFi Llama, UwU Lend, a decentralized finance, or DeFi, protocol that acts as a money market on the Ethereum blockchain, has surpassed $50 million in total value locked (TVL). The non-custodial protocol was created by Michael Patryn, known by the pseudonym "Sifu," who was the co-founder of defunct cryptocurrency exchange QuadrigaCX.

UwU Lend allows users to earn interest on deposits and pay interest to borrow funds on its platform. Outstanding loans on UwU lend are overcollateralized, with more collateral backing them than debt. A small amount of fees from each transaction goes into the UwU treasury. Borrowers do not have a repayment schedule and there is no limit on loan duration.

The protocol also features its native token, UwU. The tokens can be used to participate in revenue share by staking in the liquidity provider pool. The max supply of UwU is 16 million, of which 50% are for community emissions, 25% are for investors and 25% for the team.

Michael Patryn was previously known as Omar Dhanani before two name changes in 2003 and 2008. He has been convicted of various financial crimes in the United States. After founding QuadrigaCX with co-founder Gerald Cotten in 2013, Patryn left the firm in 2016, citing a disagreement with its listing processes. Cotten died in 2018 of Crohn's disease and took the private keys to the firm's crypto to his grave — leading to the permanent loss of over $145 million of customers' funds.

Earlier this year, DeFi detective zachxbt uncovered that Patryn was running DeFi protocol Wonderland as its co-founder and under the pseudonym Sifu. After heavy community backlash resulting from the dox, the beleaguered DeFi project wound down operations. The price of Wonderland tokens collapsed as a result.

https://t.co/Rkin96Ccdb https://t.co/A9UQ22X2gH pic.twitter.com/hnvOPeLO16
— 0xsifu (@0xSifu) September 21, 2022

Netflix’s crypto swindler documentary draws wild community reaction

April 1, 2022 Coin Telegraph

Coin Telegraph

Viewers of the documentary, especially those aware of the whole saga, resonated with the conspiracy theory about the founder faking his death.

Netflix’s new crypto documentary titled "Trust No One: The Hunt for the Crypto King'' was released on 30 March amid much fanfare. The documentary is based on the mysterious death of the now defunct crypto exchange QuadrigaCX founder.

The founder of the crypto exchange allegedly died on a trip to India. Along with him, he took away the whereabouts of the keys to crypto wallets containing $250 million worth of cryptocurrencies.

Unofficial investigations and numerous conspiracy theories followed the mysterious disappearance/death of the QuadrigaCX founder. The Netflix investigative documentary aims to clear some mystery around the high-profile crypto case that puzzles many even today.

The crypto swindler documentary takes inspiration from “DON’T F*CK WITH CATS”-style investigative thriller and people already seemed to be hooked to the release. One Twitter user wrote:

“Watched it at the gym tonight. Got only 1/2 way through, but it's already insane: Biggest red flag is faking death with Crohn's disease, seriously?! You don't need an MD to know Crohn's disease rarely leads to death!”

Another expressed a similar view said:

“What a crazy story. Dig up that grave!”

A user who had allegedly used the QudrigaCX back in the day claimed that he smelled fishy behavior way early and took money out in time, after watching the documentary, he wrote:

“I had a lot of coins on that exchange. But one day I sensed something strange with the way the trades were being handled. Having set up bloomberg systems for AIMCO, i had a good feeling for how these exchanges should work. Right then and there I pulled all the coins out.”

While the investive documentary is quite engaging and doesn’t really require anyone to have any crypto knowledge to understand it, many in the crypto community who has closely covered the story or were affected by the bust of the exchange found it quite fulfilling.

Mike Oltoff, founder and CEO of Coin card claimed many of his friends played a cameo in the documentary including himself

“It's so weird to see a bunch of my friends in a documentary, but they all did great! Funny enough, I cameo on this documentary too in the background of one of the videos about Patryn. “

The conspiracy theories about the founder faking his death to get away with millions of dollars worth of customers’ crypto, resonated with the majority of the viewers.

Daniele Sestagalli discusses Wonderland’s future after QuadrigaCX co-founder dox

January 28, 2022 Coin Telegraph

Coin Telegraph

"Some people said Wonderland should just be wound down and funds be given back to token holders. I believe this is the easy way out," says Sestagalli.

On Friday, Daniele Sestagalli, co-founder of decentralized finance, or DeFi, protocol Wonderland and stablecoin protocol Abracadabra, issued a statement on the path forward after the doxing of his colleague Michael Patryn:

“Do we wind down or continue to fight for the aspect of an investment DAO [decentralized autonomous organization] being a revolutionary new organization? For the option that I am for, which is to fight and bring someone new and experienced to manage the treasury.”

The day prior, an investor uncovered the identity of Wonderland's chief financial officer to be Patryn, who was the former co-founder of defunct Canadian cryptocurrency exchange QuadrigaCX. Over $145 million worth of QuadrigaCX customers' funds are still missing after the mysterious death of its co-founder in late 2018. In addition, Patryn was convicted of operating a credit card fraud scheme under a different name in 2002.

Although no allegations of misconduct have been made about Patryn's tenure at Wonderland, the thought of appointing an individual with past criminal financial mishaps to manage the protocol's treasury raised alarms among many Wonderland users. In a forum proposal cited by Sestagalli, its author, a co-founder of Bastion trading known as "TheSkyHopper," calls for the immediate removal of 0xSifu (Michael Patryn) from treasury management and proposed for members of his firm to join in as replacements. One user, El_jefe_NYC, commented:

“This is EXACTLY the type of action Dani needed to do in these hard times. That's how a leader is supposed to react. We will grow back MUCH stronger moving forward.”

Wonderland is a reserve currency protocol built on the Avalanche blockchain. On Jan. 2, before the recent crypto market turmoil and the Michael Patryn dox, Wonderland's treasury balance amounted to $1.9 billion in total value locked. However, that has dropped to $278 million at the time of publication.

quadrigacx