Business

Derek Tonin

More details about QuadrigaCX co-founders past emerge

QuadrigaCX might now have officially entered bankruptcy proceedings, but reporters and investigators will look to discover what really happened with the embattled Canadian crypto exchange for a long time to come. Recently, we found out more about the past of it’s cofounders, Michael Patryn and deceased former CEO Gerald Cotten.

Amy Castor, the Canadian financial reporter who has consistently been on top of this story, just published a new article titled “QuadrigaCX: Patryn, Cotten, and Midas Gold—a Liberty Reserve exchanger.” In it, she goes way back to focus on the period between 2008 and 2013, when Patryn, and at some point Cotten, collaborated on a site called Midas Gold.

Before starting that site, Patryn allegedly went by a different name, Omar Dhanani, and was arrested for his participation in an online identity theft ring. After being deported from the United States, he apparently started the Midas Gold Exchange, a digital currency trading site, in April 2008 under the alias Omar Patryn. An earlier post on a site called M-Gold.com aluded to the company being in business since 2005, which would have been while he was in prison.

The site operated off of a system created by Liberty Reserve, which was a Costa Rican based digitial currency service. Essentially, a user could go to M-Gold.com to buy the LR currency and send it to other users. Castor describes its heyday:

“During 2009 to 2013, Liberty Reserve was in full swing. These were the sunshine days of criminal activity. A huge number of transactions were related to high-yield investment programs (HYIPs)—better known as ponzis schemes—credit card trafficking, stolen ID information and computer hacking.” 

At some point, Gerald Cotten appears to have gotten involved. We know this because of court exhibits that show the Midas Gold account with Liberty Reserve was under the email address [email protected] Although the user name was Omar Patryn, the same email was used for many of Cotten’s other online accounts.

Liberty Reserve’s founder was arrested for money laundering in 2013, and the domain seized. US authorities then shut down many domains linked to the site, including M-Gold.com. A few months later, QuadrigaCX launched.

We’ve previously been lead to believe that Cotten was a respected cryptocurrency enthusiast who might have gone down a dark path. If he really was involved with Patryn’s other schemes though, and this was all a long con that ended in a way neither he nor his customers could have ever imagined, that’s a much darker tale for the history books.

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