The Wonderland DeFi altcoin community has been shaken when a Twitter user exposed an anonymous executive with ties to one of the largest crypto Ponzi schemes in history. A senior executive at DeFi altcoin platform Wonderland has turned out to be Michael Patryn, one of the co-founders of failed crypto exchange QuadrigaCX. The regulators concluded that QuadrigaCX was a Ponzi scheme after nearly $190 million in cryptocurrencies disappeared in 2018. Details cryptocoin.com‘in.
Scandal in DeFi altcoin project
Wonderland’s token TIME dropped from its November high of $10,000 to an all-time low of $335 on Thursday. Fans of popular decentralized finance platform Wonderland are stunned after a Twitter user revealed the identity of a senior executive who was previously implicated in one of the biggest cryptocurrency scandals in history. Until recently, Michael Patryn was known anonymously within the Wonderland community as “Sifu” and was responsible for managing his treasury. But he gained fame as the co-founder of the previously unsuccessful Canadian crypto exchange QuadrigaCX. Before that, he was involved in fraud and theft. Since his identity was revealed, he has stepped down from his role as Wonderland, which describes itself as “the first decentralized cross-chain reserve currency protocol”.
The DeFi platform, served on the Avalanche blockchain network, offers 83,000% returns for investors lending crypto to the asset basket that supports its native token. According to the website, Wonderland’s treasury balance is approximately $675 million and over 820,000 TIME tokens have been deposited. The Wonderland Discord channel has more than 91,000 members, and chats include everything from memes to technical analysis and discussions on price fluctuations. The revelation of Patryn’s involvement in Wonderland, however, frightened members of the community. Even before Quadriga’s collapse, Patryn, who formerly went by the name Omar Dhanani, had a criminal record. He spent time in federal prison and was deported to Canada after being convicted of conspiracy to commit credit and debit card fraud in 2005 and conspiracy to commit theft, computer fraud and grand theft in 2007.
His past is full of darkness.
Later in 2013, Patryn and Gerald Cotten founded QuadrigaCX, which has grown into one of Canada’s largest crypto exchanges. But in 2019, Cotten died on a trip to India just 12 days after he changed his will. His wife did not disclose the death more than a month later, and the Wall Street Journal reports that Cotten left about $250 million in a crypto vault that he could access alone. The company went bankrupt two weeks later. As piles of money left the company’s online accounts and circulated on exchanges commonly used by money launderers, evidence began to mount that a bad game was imminent. Soon after, news came that nearly $190 million in cryptocurrency owed to 115,000 customers was deemed lost. The Ontario Securities Commission has since determined that QuadrigaCX is a Ponzi scheme. “What happened with the Quadriga was an old-fashioned scam wrapped in modern technology,” the regulator said.
Patryn has been keeping a low profile since the QuadrigaCX scandal, operating under her online alias. In September, Wonderland released the TIME token. Patryn has been described as a core member of the founding team. And on Wednesday, Patryn’s true identity was revealed. The sleuth Zachxbt.eth, which has exposed various dark actors in the digital asset space in the past. On Twitter, he revealed the identity of QuadrigaCX Co-Founder Michael Patryn. People’s trust in Wonderland has been shaken given QuadrigaCX’s reputation as one of the most notorious “exit scams” in digital asset history. Another Twitter user said, “Every time something like this happens, it makes our industry seem extremely incompetent. I am ashamed,” he complained. Native Wonderland token TIME dropped from its peak of around $10,000 in November to an all-time low of $335 on Thursday after several mass liquidations, making it one of the worst-performing cryptocurrencies even amid a wider decline in the crypto market.
Meanwhile, the DeFi platform is currently in talks for a merger with the crypto lending marketplace Abracadabra. Wonderland founder Daniele Sestagalli later confirmed Zachxbt.eth’s claims in a tweet followed by an official statement. “An individual’s past does not determine their future,” he said, but agreed that Patryn should step down as treasury manager “until a vote is taken to confirm it.” He explained that to provide assurance on Wonderland’s security, all funds in Wonderland are protected through a “multiple signature” process between him and others on the Wonderland team.
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