B.C. files unexplained wealth order against Vancouver-based crypto firm

The owners of a now-defunct Vancouver-based cryptocurrency exchange company could lose hundreds of thousands of dollars in cash and luxury items if they can’t explain where the company’s wealth is coming from.

The B.C. government has filed an unexplained wealth order (UWO) against Quadriga Coin Exchange (Quadriga CX).

“If successful, this application would see the forfeiture of $250,200 in cash, 45 gold bars, four luxury watches and a number of pieces of expensive jewelry. Through this action, we are demonstrating again that criminals will have to prove that their assets are the proceeds of lawful activity and not financial crime,” Minister of Public Safety and Solicitor General Mike Farnworth said on Wednesday.

This is the third UWO filed by the B.C. government, the minister says. A UWO is a court order that requires a person to explain how their assets were acquired, and it can be issued if there’s “a reason to suspect a person is involved in illegal activities,” the province explains.

“The [international], criminal actions of Quadriga Coin Exchange (Quadriga CX) led to thousands of people losing their life savings. The fact that this organization has been the subject of a Netflix documentary related to a high-profile cryptocurrency fraud shows that these types of crimes do not show respect for borders. Only strong enforcement that undermines the profit motive will have an impact on such criminal organizations,” Farnworth said.

“The Quadriga CX case was also profiled by Law and Order Toronto: Criminal Intent in a February 2024 episode, The Key to the Castle. While the fallout of cryptocurrency theft that leaves many victims in its wake is topical, what is even more timely is the recovery of these ill-gotten funds and converting them to community benefits in a public way.”

Quadriga subject of years-long controversy

QuadrigaCX was one of Canada’s largest cryptocurrency exchanges before it was shut down amid a storm of controversy in January 2019. The company filed for creditor protection that month, saying at the time that it owed roughly 115,000 users $70 million in currency and an additional amount of cryptocurrency coins valued at approximately $180 million based on market prices the December prior.

The RCMP and FBI had also opened investigations into Quadriga.

“We will continue to take the assets from unlawful activity and redirect the proceeds of crime to much-needed victim services programs and crime prevention initiatives, such as the anti-hate grants to communities announced on Feb. 15, 2024,” Farnworth added Wednesday.

Unexplained wealth orders were announced in March 2023, alongside amendments to B.C.’s Civil Forfeiture Act.

“Money-laundering schemes have become increasingly sophisticated, and unexplained wealth orders will be a key tool in our toolbox to combat organized crime,” Farnworth said at the time.

The province explained UWOs target criminals who are also responsible for the toxic drug supply plaguing the province, and that the orders would “help the Civil Forfeiture Office (CFO) build stronger cases against assets used in organized crime, drug trafficking, and money laundering.”