Quadriga co-founder’s fall from grace: Fintech hero’s past crimes catch up with him

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Updated: Mar 20, 2019 2:19 PM

Once there, Omar Dhanani underwent a remarkable transformation -- into a new identity and the wild world of cryptocurrencies.

Quadriga, Fintech, crimes, tech crime, newsQuadriga co-founder’s fall from grace: Fintech hero’s past crimes catch up with him

His crimes: identity theft related to a bank-and-credit card scam. His sentence: 18 months in U.S. federal prison and, later, deportation to Canada.

Once there, Omar Dhanani underwent a remarkable transformation — into a new identity and the wild world of cryptocurrencies.

Dhanani, now known as Michael Patryn, has emerged as an enigmatic figure in the strange case of Quadriga Fintech Solutions Corp., the digital exchange owner that hasn’t been able to find C$260 million ($195 million) of clients’ cash and cryptocurrencies. Patryn co-founded Quadriga five years ago with the late Gerry Cotten, whose sudden death in December at age 30 left the Vancouver-based firm in shambles.

Patryn denied he was Dhanani in a Feb. 8 report in Canada’s Globe and Mail newspaper and disputed a subsequent report linking him to a criminal past. But Canadian records obtained by Bloomberg News confirm he legally changed his name — twice: in 2003 and in 2008.

The revelation adds a new layer to the mystery surrounding Quadriga, whose closure in January left 115,000 clients wondering if they’ll ever get their money back. Cotten ran the operation mostly from his laptop, so his death while traveling in India threw the business into disarray. The firm has been under creditor protection since February, with Ernst & Young working to unravel the firm’s dealings. Digital storage accounts used by Quadriga to hold Bitcoin for clients had been empty for months before the CEO’s death, according to E&Y.

Patryn declined to comment about his criminal record or his name change.

Patryn changed his name from Omar Dhanani to Omar Patryn with the British Columbia government in March 2003. Five years later, he registered a name change to Michael Patryn in the same Canadian province.

In the U.S., Dhanani had been charged with numerous crimes. He pleaded guilty to conspiracy to commit credit-and-bank card fraud at the age of 22 in 2005, according to a statement from the U.S. Justice Department. Dhanani helped operate shadowcrew.com, a now defunct marketplace for trafficking stolen credit and bank card numbers. Dhanani also admitted guilt in 2007 to separate criminal cases for burglary, grand larceny and computer fraud, according to California state court records.

After serving his time, the U.S. deported him to Canada, where he reinvented himself as a Bitcoin entrepreneur. Patryn calls himself a “fintech advisor and portfolio manager” in his LinkedIn profile, which also lists him as founder and chairman of Vancouver-based Fintech Ventures Group since 2015, described as “Canada’s first incubator for blockchain related startup companies”.

Patryn has been trying to bury his past. Last July, he hired a firm to purge unflattering material about him from the internet. One of the posts was a complaint about Omar Dhanani and a defunct online business called Midas Gold Exchange Inc., which the Canadian government listed Omar Patryn as its sole director. Documents filed in a related lawsuit mention a Reddit post that linked Patryn to Quadriga.

Read More: Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty

Patryn was involved in Quadriga from the start, helping Cotten establish one of Canada’s first Bitcoin exchanges. Patryn discussed those early days in an email exchange with Bloomberg. He and Cotten worked together at nonprofit organizations such as Vancouver’s Bitcoin Co-op, providing assistance with education and user adoption on the topic, he said in an email last month.

Cotten, who served as chief executive, recounted in a 2014 podcast how he and a partner he didn’t name were working on the idea since August 2013 and by Dec. 26 launched the Quadriga platform and set up a Bitcoin ATM in a West Coast city known for early forays into crypto and blockchain.

Patryn said he departed three years ago over a “fundamental disagreement” with Cotten on his decision to halt the listing process for the firm.

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

Patryn said he stopped being close to Cotten after that, though he heard from the founder weeks before his death.

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

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