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TRANSCRIPT: A Death in Cryptoland, EP 3, “Cracks in the Empire”

[Promo for Medieval Times]

TAKARA SMALL: [VOICEOVER] If you want to indulge in a little pageantry from the Middle Ages, there’s a show you can catch called Medieval Times. It’s a thing across North America. It’s set in a pseudo castle, in a big arena. Men dressed as brightly coloured knights speed through the stadium on horseback…capes flying. Jousting before a crowd, most of whom are wearing paper crowns.

It’s basically dinner theatre. I think you even eat with your hands. The idea is to transport you back to the middle ages for a royal tournament. You get to cheer for one of the “knights” doing battle while “serfs” and “wenches” serve your meal. This is where Michael Patryn — the co-founder of QuadrigaCX — has said he and Gerald Cotten met for the first time. That Gerry and Michael would go to a show where people pretend to be part of the Royal court from hundreds of years ago seems a little strange for two guys who would go on to launch an exchange for modern currencies. Surely they would have loved the competition or, the illusion of it.

It was in Toronto, around 2012. The year before Quadriga launched. It may be that this was their first time meeting face to face. But the co-founders of QuadrigaCX had a long history together, online. One that stretched back years.

AMY CASTOR: The founders of Quadriga had met on earlier forums and that's important because that was the sort of world they were working in; they were operating in before they went on to launch Quadriga. And it brings into question what their intentions were when they went and launched this exchange in Canada.

TAKARA SMALL: [VOICEOVER] Gerry had been dealing in digital currencies online and on the fringes… but now he and Michael were trying to move into the real world.

With real stakes.

AMY CASTOR: His career up until he launched Quadriga was you know, from a kid, a 15-16-year-old, running stupid Ponzis online so, he can make a few bucks. The thing with Quadriga, it wasn't a kid's game anymore. I mean this was serious business. Hundreds of millions of dollars this is the real deal, the stakes are a lot higher.

TAKARA SMALL: [VOICEOVER] There were high hopes, but there would be big challenges ahead. A computer glitch, a court case, and a freefall in the value of bitcoin would contribute to the unraveling of the company. And as this happens, people will wonder: were the odds stacked against a company trying to go legit? Or, was Gerry scamming people from the beginning?

ANDREW WAGNER: He shouldn't have pretended to be a competent holder of money. He either lied about his competence with people's money or he lied about his morality.

ALEX SALKELD: I guess that's why this is all such a mystery, because most of the things that are mysterious facts that we can't quite know have arguments for both sides. Was it this or was it this? And, you know, a lot of the arguments for, like, the unlucky circumstances side of like, yeah, man, just one thing went wrong after another, and that Murphy guy took us down.

[Theme music]

TAKARA SMALL: [VOICEOVER] I’m Takara Small, and this is A Death in Cryptoland. Chapter 3 — Cracks in the Empire

MICHAEL PATRYN: He was a very interesting kid and we ran a few projects together and eventually we settled in Vancouver and at one point Gerry mentioned wanting to run an exchange and so I provided the seed funding to Gerry to launch Quadriga.

TAKARA SMALL: [VOICEOVER] That’s Michael Patryn, Quadriga’s co-founder, He’s on his cell from somewhere in Thailand. One of our co-workers spoke with him not long after the news came out that Gerry had died. Michael’s nickname for him had apparently been “Sunshine.”

MICHAEL PATRYN: Yeah, he was like a ray of sunshine, the guy just always had a big goofy smile and laughed and he used to love to prank jokes all the time. He used to say he didn’t open up to many people but he was able to open up to me and he was like a little brother to me for a great long time.

TAKARA SMALL: [VOICEOVER] Like a brother. Until they’d had a disagreement over the company. A huge fight Michael calls it, but that would come later. Those first couple of years, they saw only successes. This is Gerry being interviewed at an industry convention in the Bahamas. Talking up his credentials:

GERRY COTTEN: [Bahama Convention clip] one of the differences between Quadriga CX and a lot of our competitors is that I come from a background where I've dealt with digital currencies in the past. So, I know the challenges that Bitcoin exchanges and any sort of digital currency faces.

TAKARA SMALL: [VOICEOVER] He describes their meteoric rise.

GERRY COTTEN: [Bahama Convention clip] So over two years, we began in December 2013. We've gone from zero market share to now 80 percent market share as most of our competitors have fizzled out.

TAKARA SMALL: [VOICEOVER] And he had bigger ambitions…

GERRY COTTEN: [Bahama Convention clip] For Quadriga we're seeing quite a bit of blue sky. So as we expand globally and are able to tap into a lot of that market, we'll be able to grow and our profits will increase dramatically.

TAKARA SMALL: [VOICEOVER] But in order for the company to grow… Gerry needed to change the optics, build public trust. Bitcoin had a bad rap. So, he registered with Canada’s anti-money laundering watchdog FINTRAC. And less than a year after they had formed the company, they had the idea to list Quadriga on the Canadian Securities Exchange.

CLIP: We’re going to start off tonight by highlighting a few companies in the Toronto space that are involved in crypto.

TAKARA SMALL: [VOICEOVER] It all began, one mild winter’s evening in 2015. On St. Patrick’s Day.

CLIP: We're going to start off with Gerald Cotton from Quadriga.

TAKARA SMALL: [VOICEOVER] A little more than a year after founding Quadriga… Gerry has left Vancouver and is now in Toronto.

CLIP: Gerald. Are you around here?

TAKARA SMALL: [VOICEOVER] He’s a guest speaker at a conference.

GERRY COTTEN: [Clip] (clapping) Thanks, Anthony. It's a pleasure to be here tonight, in front of such a huge crowd that's so enthusiastic about Bitcoin and other decentralized technologies.

TAKARA SMALL: [VOICEOVER] Gerry’s hair is neatly combed back. He’s standing stiffly in a dark suit, a crisp white shirt, and a blue tie. He describes how the company started off pretty small, but that their fortunes are changing.

GERRY COTTEN: [Clip] Over the past 12 months, we've exchanged more than twenty five million dollars’ worth of Bitcoin.

TAKARA SMALL: [VOICEOVER] He talks up Quadriga a bit more. Then he pauses.

GERRY COTTEN: [Clip] umm

TAKARA SMALL: [VOICEOVER] He’s got news.

GERRY COTTEN: [Clip] We have announced that Quadriga CX will be going public. It should be sometime next month. (Clapping) Anyways I'm thrilled to be at this event. I see it as a pivotal moment in the Bitcoin space. It's basically a new chapter as we move towards the mainstream financial industry.

TAKARA SMALL: [VOICEOVER] He smiles modestly and then exits. Stage left. The little Canadian company that could.

GERRY COTTEN: [Clip] Thank you. ( clapping)

TAKARA SMALL: [VOICEOVER] It would have been huge. The first cryptocurrency exchange in the world to go public. Michael took charge of getting the company listed. He thought it would bolster their reputation.

MICHAEL PATRYN: That this would create a lot of trust and make Quadriga the most trusted crypto exchange ironically.

TAKARA SMALL: [VOICEOVER] In case you missed that: He says it’s ironic, because he thought it would make Quadriga the most trusted crypto exchange. A move to legitimize a space tainted by scandal. But going public would never come to pass.

ALEXANDRA POSADZKI: Bitcoin was very common with essentially criminals in its early days.

TAKARA SMALL: [VOICEOVER] I’m on a video call with Alexandra Posadzki. She’s a business reporter with the Globe and Mail newspaper in Toronto. She’s got strikingly red curly hair and big glasses. When bitcoin was first invented, she says, it didn’t have a good reputation.

ALEXANDRA POSADZKI: It was very often used to launder money. So you know, to move proceeds of crime, because it has this sort of pseudo anonymity built into it, which means in the early days, if I wanted Bitcoin, I could open an account at one of these exchanges. And very often they would take very little or even no steps to actually verify that I am who I say that I am. And so even though every single Bitcoin transaction is actually technically public, it's recorded in this public ledger that anyone can witness. You know, this shows this user sent this amount of cryptocurrency to this other user. You wouldn't know who the user is behind these accounts were, necessarily. And so for that reason, Bitcoin was very common, with, essentially, criminals in its early days.

GERRY COTTEN: [True Bromance Podcast clip] It's kind of interesting because right now the regulation on Bitcoin in Canada is a total grey area.

INTERVIEWER: [True Bromance Podcast clip] Oh, it's kind of like the Wild West.

GERRY COTTEN: [True Bromance Podcast clip] It is because Bitcoin isn't a real currency. Right. As far as the government is concerned.

TAKARA SMALL: [VOICEOVER] This is Gerry on that Podcast we’ve mentioned before - the one calledTrue Bromance. And in this episode, they’ve got the young CEO explaining his company… a business that’s so ground-breaking - even the government doesn’t know what to think of it.

GERRY COTTEN: [True Bromance Podcast clip] And as far as money laundering is concerned, it only matters when it comes to real currency. Therefore, just the way the legislation is written, they want to do something about it, but until the government changes the legislation, there's nothing they can do.

INTERVIEWER: [True Bromance Podcast clip] So as far as the government is concerned, it’s monopoly money.

GERRY COTTEN: [True Bromance Podcast clip] Exactly. That being said, I'm being proactive with the regulations. So because obviously they are going to impose new regulations in the near future.

INTERVIEWER: [True Bromance Podcast clip] Yeah.

GERRY COTTEN: [True Bromance Podcast clip] I don’t want to be sort of left out in the cold without any of these things set up. Right. So basically, I've done a bit more than I have to do.

INTERVIEWER: [True Bromance Podcast clip] You've gone above and beyond. (Exactly)

TAKARA SMALL: [VOICEOVER] Gerry makes sure they know Quadriga is registered with Canada’s anti-money laundering watchdog. Then he describes how this is supposed to keep his company in check.

GERRY COTTEN: [True Bromance Podcast clip] So if someone walks into our office with 40 grand cash we do get their I.D.

INTERVIEWER: [True Bromance Podcast clip] Yeah. And you have to mail that into the FINTRAC and say this person came in.

GERRY COTTEN: [True Bromance Podcast clip] No, we don't actually. FINTRAC just told us don't mail it to us.

INTERVIEWER: [True Bromance Podcast clip] Don't. Oh really. Yeah. Just in case, so keep all the records and then they could come in and you’ll have a list of all…

GERRY COTTEN: [True Bromance Podcast clip] Exactly. So in the event they're like, ‘so and so’ criminal came into your place last week and did this. Yeah. I can be like I complied. I more than complied with the regulations.

INTERVIEWER: [True Bromance Podcast clip] Yeah.

GERRY COTTEN: [True Bromance Podcast clip] And so forth.

INTERVIEWER: [True Bromance Podcast clip] Oh. So you would never stop anyone like it?

GERRY COTTEN: [True Bromance Podcast clip] Oh well I would obviously stop someone if it was a blatant case of fraud or...

INTERVIEWER: [True Bromance Podcast clip] But if somebody came in and they had like a hundred grand and it was some random person and there weren't a big gold chain and they got tattoos all over their face, (LAUGHTER) and many piercings… no would you take the hundred grand or no?

GERRY COTTEN: [True Bromance Podcast clip] I mean, that's a kind of a ridiculous scenario. Well, no, but the odds of someone walking to my office,

INTERVIEWER: [True Bromance Podcast clip] What if that happened? Would you take the hundred grand or no?

GERRY COTTEN: [True Bromance Podcast clip] Legally speaking, I'd comply with all of FINTRAC’S requirements. And I would.

INTERVIEWER: [True Bromance Podcast clip] OK. Yes.

TAKARA SMALL: [VOICEOVER] There’s a bit of dead air — I mean that’s a lot of cash Gerry. And then he adds a caveat.

GERRY COTTEN: [True Bromance Podcast clip] Generally speaking, for my clients who might be listening yet, please don't do that. I'd rather a bank transfer. So, I'm not walking out of the office with one hundred grand in my pocket.

TAKARA SMALL: [VOICEOVER] In the run up to go public, Michael Patryn hires a consultant to help raise the money for the initial public offering. Here’s Amy Castor - the freelance journalist in the U.S.

AMY CASTOR: And they raise a bunch of money, they raise like 850,000 Canadian dollars from some major Canadian brokerage houses. But you know, it never takes off, never happens. Instead they burn through all the money, and by June 2015, the company just run out of money. It's lost 45% percent of its market share according to Patryn and Patryn gets pissed off and he blames…

TAKARA SMALL: [VOICEOVER] And Michael launches a lawsuit against the consultant, but it never really goes anywhere. It’s at this point things get a little more interesting. Quadriga appears to morph.

AMY CASTOR: So, Michael Patryn steps away. As far as we know, what we're told, he steps away from Quadriga in 2016. He says, is because he disagrees with Gerald Cotten's decision to call off the listing of the company. What they're saying is that he wanted to continue to take the company public and Gerald didn't want to. So, they couldn't come to terms on that, so they parted ways.

TAKARA SMALL: [VOICEOVER] And at the same time, a bunch of Quadriga’s directors step down, all at once.

AMY CASTOR: And then at that time, from then on you know, Quadriga sort of becomes this one man show with basically Gerald Cotten taking care of everything and running everything from his laptop. He's got a couple contractors that are helping him out. But mostly all the major decisions and everything is coming from Gerald Cotten. Mr. Cotten, yup Mr. Cotten and his laptop. (laughter)

AMY CASTOR: So from then on, I mean that's the narrative at least that we've been told by Cotten and Quadriga that Patryn has stepped down and now it's just Gerald Cotten doing whatever he wants to do.

ANDREW WAGNER: People close to Quadriga inside were supportive of Gerry taking control.

TAKARA SMALL: [VOICEOVER] Andrew Wagner is that bitcoin believer in Vancouver who knew both Gerry and Michael. He says many of them thought it was for the best, up until then it looked like Michael had control.

ANDREW WAGNER: We thought it was going to be better, but I think it was worse.

[Beat]

TAKARA SMALL: [VOICEOVER] Although Gerry bragged about going out of his way to comply with regulations… it looks like he actually ignored them.

AMY CASTOR: And the British Columbia Securities Commission says that Quadriga is now banned from selling securities altogether. And they issue a cease trade order so that, because apparently Quadriga has not submitted a financial audit for 2015 and all the regulatory filings, all the legit things that Quadriga should have been doing, sort of stopped.

TAKARA SMALL: [VOICEOVER] In those texts which were leaked online, Gerry tells his operations manager, Aaron that he hadn’t renewed his FINTRAC registration when it came due because, “it was more hassle than it was worth.” An auditor had turned up at their office in Vancouver. Normally bitcoin companies weren’t allowed to register with FINTRAC… the regulatory agency wasn’t set up to deal with digital currencies. So Quadriga arranged to offer the option to exchange US dollars for Canadian. And that qualified them. But then there was this audit. Gerry laughs about it in his texts saying, “the girl who did it was about 25.” She’d wanted to learn about bitcoin. And that, “She only wanted to see our Canadian to US conversions, which we had none of because no one used that service LOL.” So with no one watching, Gerry carried on with business. But there would be obstacles. Some Gerry could have predicted, others not.

AMY CASTOR: One of the big issues that Quadriga faced when it launched was that it couldn't get banking. Banks don't want to deal with companies that are associated with cryptocurrency. So, since they couldn't have Quadriga itself could not as a business set up a bank account, what it had to do was it had to find work arounds. And it found these work arounds through what are called payment processors, right.

TAKARA SMALL: [VOICEOVER] Payment processors are third parties… in this case individuals or numbered companies which would open bank accounts on behalf of Quadriga.

AMY CASTOR: The bank won't know what the money's for, maybe they tell the bank a different story, like it's for real estate or whatever. And then if you are a Quadriga customer, you want to send money to Quadriga. The exchange would then direct you to send money to one of these bank accounts set up by one of their third party processors.

TAKARA SMALL: [VOICEOVER] Over time Quadriga worked with more than ten of them. But in early 2018 troubles began with one of Quadriga’s processors. One of Canada’s major banks, CIBC observed some strange activity with a number of accounts.

ALEXANDRA POSADZKI: So the bank noticed that in this brief period of a couple of months, I believe between like December and February, they got this influx of money into this, these accounts that were operated by this guy. I think it raised a red flag for them just to have I think it was like six north of 60,000,000 million dollars kind of flooding into these bank accounts all at once from hundreds of different sources, so that was kind of unusual.

TAKARA SMALL: [VOICEOVER] CIBC had received some requests from Quadriga customers who had wired money to accounts belonging to the processor. But now these folks wanted their funds back. So the bank takes a look, but they can’t figure who the money belongs to.

AMY CASTOR: And you know, they notice some of the money is being put into some of these personal accounts, too. And so they see this sort of funny business happening, and so they freeze all these accounts.

TAKARA SMALL: [VOICEOVER] Accounts worth over 26 million dollars Canadian.

Money Gerry would have been counting on. CIBC then goes to the courts to help decide who all this cash belongs to. And this came just months after the company had lost ten million bucks worth of a cryptocurrency called Ether. A software bug had permanently frozen hundreds of millions worth of assets world wide. Not only that, the value of bitcoin was changing. After hitting a high of nearly 20 thousand US. Like a roller coaster, it rounded a peak and then things really headed south. Bottoming out below 35 hundred US.

AMY CASTOR: In 2018, the price begin to crash. So people were anxious to sell their assets so they could realize their profits. When they went to take their money off of Quadriga, they couldn't get it off because Gerald Cotten didn't have the cash to fund their withdrawals.

QCX-INT: It was very slow getting your funds out of Quadriga. I’ve been through that type of situation before with other exchanges.

TAKARA SMALL: [VOICEOVER] QCX-INT is the Quadriga customer-turned-sleuth who lost hundreds of thousands of dollars. He says initially he didn’t see the red flags.

QCX-INT: This happens all the time in crypto. It was business as usual, it’s annoying, but you know we’ll deal with it.

TAKARA SMALL: [VOICEOVER] With so much of his cash on the exchange, he was directly in contact with Quadriga's director of operations.

QCX-INT: The lines of communication were good and Aaron Matthews was reassuring other traders including myself that, yes we have a backlog in processing we have funds held up in this court case, the notorious case, where their $25 million of their funds had been frozen, which was true and verifiable.

TAKARA SMALL: [VOICEOVER] So he believed them, even sympathizing with the company’s bank problems because THAT part of the story was true. It just wasn’t the WHOLE story. Gerry was hiding something. Alexandra Posadzki was hearing from Quadriga customers who were upset.

ALEXANDRA POSADZKI: They were having trouble getting money out of the exchange. They had requested to get their money and then had waited weeks or even months and hadn't gotten their money yet and they were very frustrated so they wrote in to me asking if I could help them.

TAKARA SMALL: [VOICEOVER] This piqued Alexandra’s interest. It sounded like a story. Coincidentally she and Gerry had gone to the very same school, at the exact same time.

ALEXANDRA POSADZKI: I know we had friends, mutual friends in common on Facebook

TAKARA SMALL: [VOICEOVER] So Alexandra emails with Gerry.

ALEXANDRA POSADZKI: When I asked him about this 28 million dollars that had been frozen. He told me that it was because of the bank and the banks don't like Bitcoin and the banks are so threatened by this new business model. And that was really interesting. He very clearly had this sort of this perspective on the sort of financial system and the banking system and at least seemed to believe very strongly in what crypto stood for in terms of being this kind of stateless, unregulated, decentralised form of value transfer user to user. And he felt very strongly that the banks were sort of discriminating against him because they felt threatened by this new form of commerce. And I think he also praised me for spelling his name right, because Cotten very often auto corrects to Cotton, and his spelling was Cotten.

TAKARA SMALL: [VOICEOVER] So Gerry blames the banks for his troubles. And Alexandra says, he seemed sincere.

ALEXANDRA POSADZKI: My impression from that exchange was that he was a genuinely nice guy. And I guess I got sort of duped a little bit because I walked away from it almost believing him, you know that there was maybe nothing untoward happening here, that this was just kind of a run of the mill crypto problem. I think he handled it really well. I mean in retrospect, I think it was just a very brilliant move on his part because you know when I told him that these people were having issues getting money out of his exchange, he said oh, well why don't you let me know if they're willing to kind of share their names so I can resolve it. So he sounded like he wanted to help.

TAKARA SMALL: [VOICEOVER] Alexandra reported on the court case, but it makes her a little uneasy.

ALEXANDRA POSADZKI: I think that they were using the asset freeze as the sort of sole explanation for why people couldn't get their crypto or their money out of the exchange and having a story show up in the Globe and Mail saying that CIBC had frozen their money, kind of legitimized their, well Gerry's alibi on this. You know, he could point to this story in a mainstream media publication and say well, it's the evil bank that won’t let you have your money back, it's not us at Quadriga. And so I almost feel a little bit guilty for that because I don't like to think that perhaps my reporting on this legal battle between Quadriga and CIBC, which was all entirely true and accurate, but still inadvertently may have kind of reassured people that this exchange was a legitimate business and safe to transact with.

TAKARA SMALL: [VOICEOVER] And that’s exactly how Gerry appears to have taken it. In those leaked texts with his director of operations… he seems delighted by the news coverage. He writes, “I actually think the Globe and Mail article helped us quite a bit because it legitimized all of the issues. Before it was me saying the banks were causing issues. Now it's a giant newspaper saying that CIBC stole money from us lol.” The article doesn’t actually say that, but clearly Gerry saw it as a help. Because in reality, there were other secret reasons - for why Gerry was struggling to pay out customers.

ANDREW WAGNER: So they had all this money tied up. [00:38:43] I don't think they were able to process withdrawals. And so I think they started resorting to very shady methods of moving money due to their normal channels being closed on them.

TAKARA SMALL: [VOICEOVER] Quadriga was instructing some of its customers to send their money to processors with bank accounts in foreign countries.

MICHAEL PERKLIN: I got a text message from a family friend asking for clarification because they were trying to make a deposit into Quadriga and they were just told to send their dollars to a bank in Poland.

TAKARA SMALL: Michael Perklin had recommended Quadriga to a lot of family and friends.

MICHAEL PERKLIN: I liked the fact that if something went wrong, I could just send a text message to Gerry.

TAKARA SMALL: A family friend was concerned about making a wire transfer to Poland. They wanted to know if this was legit or a scam. So, Michael Perklin asked Gerry about it.

MICHAEL PERKLIN: Gerry responded, saying, yep, it's fine. We are using a Polish account for that. Your friend can make that deposit. So I responded to my friend saying, yep, I just talked to Gerry. He said it's legit. So go ahead, send your money to Poland. It was a little bit strange, but it wasn't completely out of the realm of normalcy. And when I heard Gerry say, yep, that that's fine, your friend can feel safe giving his money to that Polish bank account. OK. Well, he's the CEO. He's Gerry. He's been in my home. I know this guy. He wouldn't lie to me.

TAKARA SMALL: [VOICEOVER] Odd bank accounts, unusual delays getting money, people were now doing a double-take. Looking more closely at Quadriga.

MICHAEL PERKLIN: Now, in the Bitcoin industry, when an exchange experiences delays and withdrawals, that's usually the first warning sign of some bad news. Now, it's not always. Sometimes delays happen and they're just delays.

TAKARA SMALL: [VOICEPOVER] But he points to a legendary story in the bitcoin world. The tale of the collapse of Mt. Gox. A Japanese exchange that “lost” over 470 million dollars U-S worth of bitcoin to a Russian hacker. Its CEO was found guilty of producing false records.

MICHAEL PERKLIN: In the case of MT Gox, those delays were a result of MT Gox not having the money to send those customers requesting the withdrawals. So the delays were stall tactics, waiting for other people's deposits to come in so they could be forwarded to the withdrawals.

TAKARA SMALL: [VOICEOVER] Quadriga’s customers were on high alert.

ALEXANDRA POSADZKI: Around that time, I was also hearing these sort of crazy rumours swirling around this company, just some really bizarre stuff.

TAKARA SMALL: [VOICEOVER] Rumours about Quadriga’s co-founder Michael Patryn —

previously only whispers in the bitcoin community — spread to Reddit.

ALEXANDRA POSADZKI: According to these rumours, Michael Patryn had once lived in the US under a different name. That name was Omar Dhanani, where he had participated in basically an identity theft ring. And what he did was he ran a money laundering service for these identity thieves. And changed his name not once but twice. First from Omar Dhanani to Omar Patryn. And then from Omar Patryn to Michael Patryn.

TAKARA SMALL: [VOICEOVER] In January of 2018 — a year before Gerry’s reported death — someone on Reddit posts, quote: “Quadrigacx run by fraudster Patryn aka Omar Dhanani” It was a big, bold post. Accusing Michael of hiding his past. And his real identity. Andrew recalls how the rumours started.

ANDREW WAGNER: Well, what really happened was someone he made an enemy of figured out that he had changed his name and become famous in the Bitcoin community and set upon himself to ruin Mike's reputation in the Bitcoin community by dredging up everything from his past. A lot of forum posts, a lot of screenshots.

TAKARA SMALL: [VOICEOVER] And remember, Patryn said he had left the company by then, a fact that was repeated by the company on Reddit.

QUADRIGACX: [On Reddit] “We must have ruffled someone's feathers. This guy is posting hypothetical nonsense about someone with a different name of someone who left our company more than two years ago.”

TAKARA SMALL: [VOICEOVER] Michael denied all of it. It was a case of mistaken identity, he said. But Andrew believed what he was hearing. And his relationship with Michael changed.

ANDREW WAGNER: Eventually I stopped being friends with him just because he wasn't being very honest. You know what I mean? Like, who he was, his past. What he's done. And that just didn't jive with me. You know, like if he had told me, Andrew, I did some terrible things in the past. Here they are, X, Y, Z. I would have been like, well, okay, everyone has a past. But he didn't do that. He didn't tell me at all. And I found that offensive. So, I ended the friendship.

TAKARA SMALL: [VOICEOVER] Michael Patryn decided to do something about those posts.

ALEXANDRA POSADZKI: At one point, he had hired this company called Reputation.ca, which is basically this company based in Toronto that will help you bury bad Google search results and promote more positive content.

TAKARA SMALL: [VOICEOVER] The problem was that when you googled his name —

that Reddit post calling him a fraudster — would pop up amongst the very first results. He agreed to pay Reputation.ca thirty five hundred dollars a month for a limited period of time to clean up his online profile. According to court documents — because that’s where things landed — the company says it created 10 websites which included positive content about Michael… pushing the bad stuff further down the google queue. But Michael wasn’t satisfied and sued.

ALEXANDRA POSADZKI: And then when we when we contacted them, they actually said that you know, they failed to vet, that they failed to vet Patryn properly when they took him on as a client.

TAKARA SMALL: [VOICEOVER] Eventually the claim was settled. Publicly Michael had denied that he was either Omar Patryn or Omar Dhanani.

INTERVIEWER: One of the things on line is this rumour that you actually go by or went by a different name in your past. Do you have any reaction to that?

MICHAEL PATRYN: Yeah I’ve seen that online for many many years unfortunately there’s not much you can do about slander over the internet with some of these people. It’s just internet rumours that unfortunately does happen in the crypto space.

TAKARA SMALL: [VOICEOVER] Next time on A Death in Cryptoland...

ANDY: He ended up going to a federal penitentiary, which is super uncommon in America if you get caught doing something bad, you're going to go to a local jail unless you do something really fucked up. Then you go to a federal prison. And Omar went to a federal prison.

TAKARA SMALL: [VOICEOVER] A Death in Cryptoland is hosted by me, Takara Small, and written and produced by Joan Webber and Enza Uda.

Eunice Kim is our associate producer.

Sound design by Natasha Aziz and Graham MacDonald.

Our digital producer is Emilie Quesnel.

Special thanks to Dave Downey, Cesil Fernandes, and Yvette Brend for her reporting and interviews with Michael Patryn.

Legal advice by Sean Moreman and fact checking by Emily Mathieu.

Chris Oke is our Senior Producer and the Executive Producer of CBC Podcasts is Arif Noorani.

If you’re looking for another podcast to listen to: Check out Uncover, from CBC Podcasts. Each season investigates a different story. From the NXIVM sex cult to the Satanic Panic of the 1980s. Find Uncover on the CBC Listen app or wherever you get your podcasts.

Transcript: A Death in Cryptoland, E3: Cracks in the Empire

Full text transcript for A Death in Cryptoland, E3: Cracks in the Empire