A top executive at DeFi platform Wonderland was revealed to be Michael Patryn, a cofounder of failed crypto exchange QuadrigaCX.Regulators concluded that QuadrigaCX was a Ponzi scheme after about $190 million of crypto went missing in 2018.Wonderland’s token, TIME, plummeted to an all-time low of $335 Thursday, down from its November peak of $10,000.Fans of the popular decentralized finance platform Wonderland are reeling after a Twitter user revealed the identity of a top executive, who previously was involved in one of the biggest cryptocurrency scandals in history.
Until recently, Michael Patryn was known anonymously as ” Sifu ” within the Wonderland community and was in charge of managing its treasury.But he gained notoriety previously as a cofounder of the failed Canadian crypto exchange QuadrigaCX.And before that, he was involved in money scams, fraud, and burglary.
Since his identity was outed, he has stepped back from his role at Wonderland, which describes itself as the “first decentralized cross-chain reserve currency protocol on the TIME token.”
Serviced on the Avalanche blockchain network, the DeFi platform offers yields of 83,000% for investors who lend crypto into the basket of assets backing its native token.According to its website , Wonderland’s treasury balance is nearly $675 million, and there are over 820,000 TIME tokens staked.
The Wonderland Discord channel has over 91,000 members, and conversations include everything from memes to technical analyses to debates over price fluctuations.But the revelation of Patryn’s involvement in Wonderland has spooked members of the community, who refer to themselves as “Frog Nation.”
Even before Quadriga’s collapse, Patryn – who has previously used the name Omar Dhanani, among others – had a criminal record.
He served time in federal prison and was deported to Canada after pleading guilty to conspiracy to commit credit-and-bank card fraud in 2005, and burglary, computer fraud and grand larceny in 2007.
Then in 2013, Patryn and Gerald Cotten cofounded QuadrigaCX, which ballooned into one of Canada’s largest crypto exchanges.But in 2019, Cotten died on a trip to India just 12 days after modifying his will.
His wife didn’t announce the death until more than a month later, and the Wall Street Journal reported Cotten had left approximately $250 million in a crypto vault to which he alone could access.
The company filed bankruptcy two weeks later.
As heaps of money left the company’s online accounts and moved through exchanges commonly used by money launderers, evidence began to mount that foul play was at hand .
Soon after, news broke that approximately $190 million worth of cryptocurrency owed to 115,000 customers was deemed missing.The Ontario Securities Commission has since determined that QuadrigaCX was a Ponzi scheme .
“What happened at Quadriga was an old-fashioned fraud wrapped in modern technology,” the regulator said.
Patryn had kept a low profile since the QuadrigaCX scandal, operating under his online pseudonym.In September, Wonderland launched its TIME token.Patryn has been described as a core member of the founding team.
And then on Wednesday, Patryn’s true identity was revealed.
—zachxbt.eth (@zachxbt) January 27, 2022
“This needs to be shared @0xSifu is the Co-founder of QuadrigaCX, Michael Patryn.If you are unfamiliar [with QuadrigaCX], that is the Canadian exchange that collapsed in 2019 after the founder Gerald Cotten disappeared with $169m,” said Twitter sleuth Zachxbt.eth , who in the past has exposed various shady actors in the digital asset space.
Given QuadrigaCX’s reputation as one of the most notorious “exit scams” in digital asset history, Frog Nation’s confidence in Wonderland has wavered.
“Lesson is, never invest in coins with ponzinomics!” tweeted Crypto Moon Coins.
—Crypto Moon Coins 🚀 (@Cryptomooncoins) January 26, 2022 Another twitter user lamented , “Everytime something like this happens it makes our industry look extremely incompetent.
Ashame.”
The native Wonderland token, TIME , crashed to an all-time low of $335 on Thursday from its November peak of about $10,000 after several mass-liquidations, making it one of the worst-performing coins, even amid a broader decline in the crypto market .
Meanwhile, the DeFi platform is currently in talks for a merger with crypto lending market Abracadabra.
Wonderland founder Daniele Sestagalli later confirmed Zachxbt.eth’s allegations in a tweet and then in a formal statement .He noted “the past of an individual doesn’t determine their future,” but conceded that Patryn needed to step down as treasury manager until “a vote for his confirmation is in place.”
To provide reassurance about the safety of Wonderland, he explained that all funds in Wonderland are safeguarded with “a multi-sign” process between himself and others on the Wonderland team.
“I hope the community now comes together and decides what the future looks like and who they want managing their money,” wrote Sestagalli..