Co-Founder of QuadrigaCX May Have Squandered Funds on BitMEX


Clues found in the public posting history of ‘MikeXBT’, a reddit user who reportedly traded large positions on BitMEX, suggest that the account may belong to Michael Patryn. Patryn is the co-founder of scandalized cryptocurrency exchange QuadrigaCX.

The exchange officially shut down its operations on January 26 following the sudden death of the exchange’s other founder, Gerald Cotten. Cotten was allegedly the sole possessor of the private keys to the exchange’s cold storage wallets where most of its users’ assets are stored. Several weeks later, QuadrigaCX filed for credit protection from the Canadian government.

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The last public comment that ‘MikeXBT’ made appeared to confirm that the owner of the account was a shareholder in QuadrigaCX. “We were invited. It was not mandatory. Most shareholders did not attend,” the comment read. Another comment posted by the account in February was in response to a comment referring to MikeXBT as “Mr Patryn.” Additional links between MikeXBT and Michael Patryn have been identified as far back as 2014.

Another unusual connection has also been identified between Michael Patryn and an individual named Omar Dahani. Last week, a report from Canadian news source Globe and Mail claimed that “Michael Patryn” was a pseudonym used by Dahani, who is reportedly a “convicted felon who served time in the United States for his role in an online identity-theft ring.” Dahani used the name “Omar Patryn” in some of his illegal dealings in the past.

However, whether or not Patryn and Dahani are the same person, Patryn claims that his relationship with QuadrigaCX ended in 2016 after disagreeing with Gerald Cotten about whether or not to take the company public.

Crypto Community Theorizes that Michael Patryn May Have Used QuadrigaCX’ Assets to Trade Multi-Million Dollar Positions on BitMEX

The fact that Patryn may have traded large sums of crypto on BitMEX is not problematic in and of itself. However, Patryn has been accused by some voices in the cryptocurrency community of allegedly using QuadrigaCX users’ funds in his trading.

Indeed, MikeXBT has made multiple public posts about trading derivates contracts worth multi-millions of dollars. “Closed my $7m long posted here from $6580, at an average of $6840. A gain of approximately 4%, plus earned a bit in maker fees and perpetual fundings,” he wrote in r/BitcoinMarkets in April of 2018; another post described a “long” position on Bitcoin worth $8 million at $6,646.

A Twitter account named “IamNomad” also posted what appear to be the discovery of high-volume derivatives trading by a BitMEX used named “Patryn.”

The alleged connections between Patryn, MikeXBT, and Dahani are particularly troubling in light of the recent discovery that many of QuadrigaCX’ known cryptocurrency wallets have been emptied.

Court-appointed auditor Ernst & Young wrote in a report that “in April 2018, the remaining bitcoin in the Identified Bitcoin Cold Wallets was transferred out bringing the balances down to nil.”

The Nova Scotian Supreme Court recently granted QuadrigaCX a 45-day extension to its stay of proceedings in order to give the exchange time to sort its affairs out before users can bring legal action against it. In the meantime, users and industry insiders are suspicious about deceit in the bizarre story of the exchange’s collapse. US-based crypto exchange Kraken is offering a $100,000 reward for information about the Quadriga assets’ whereabouts.

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