The cryptocurrency world has been rocked by a scandal that threatens to deepen the crisis of confidence among investors as cryptocurrency prices plummet.
This latest scandal touches on something sacred for the crypto space: secrecy and anonymity.
The chief financial officer of the decentralized-finance project Wonderland, one of the most prominent in the sector, is in fact Michael Patryn, aka Omar Dhanani, revealed by the Twitter pseudonymous on-chain sleuth ZachXBT.
Patryn, a Canadian citizen, uses the moniker 0xSifu on Twitter, and his most recent tweet was posted on Jan. 24.
Daniele Sestagali, the developer and co-founder of Wonderland, confirmed the revelations.
Patryn's Background and Name Changes
Michael Patryn was convicted of identity-theft charges in the U.S. and served 18 months in federal prison. He also had pleaded guilty to burglary and grand theft charges and had been deported to Canada.
Patryn founded the crypto exchange QuadrigaCX with Gerald Cotten in 2013 but jumped ship three years later. The trading platform collapsed in 2019. Investors lost $169 million. Cotten died in 2018.
He changed his name twice -- from Omar Dhanani to Omar Patryn in March 2003, and then in 2008, to Michael Patryn, Bloomberg reported,
In the U.S., Patryn was charged with several crimes, including pleading guilty to conspiracy to commit credit and bank card fraud in 2005. He allegedly operated a website called shadowcrew.com, now defunct, peddling 1.5 million stolen credit and bank card numbers. He was deported to Canada.
TheStreet has tried to contact Patryn online. His whereabouts are unknown.
The new revelation has sent a thunderbolt through the industry, which is trying to reassure regulators and lure in mainstream investors.
Wonderland's native token, Time, recent was more than 23% lower. The token has lost 96.6% of its market value since its all-time record of $10,063.72 of Nov. 7, according to CoinGecko.
Sharp Drops in Related Prices
Investors are now turning away from projects related to Wonderland. This is the case of Popsicle Finance, a liquidity provider, and Abracadabra Money, which enables investors to participate in the ever-growing number of protocols that offer high yield staking pools.
Popsicle's native token, ICE, has lost 93.7% of its market value since its Nov. 6 all-time high, while Abracadabra's native token - Spell Token - is down 85% from its Nov. 2 record.
The two projects are run by Daniele Sestagali, who said on Twitter that Patryn had stepped down from Wonderland.
"To summarize what has happened, word came out that Sifu who has been running the Wonderland Treasury, previously was a cofounder of QuadrigaCX, and has had other occurrences in the past," Sestagali said in a statement.
"I found out about this 1 month ago, I am of the opinion of giving second chances, as I have mentioned on Twitter. I’ve seen the community very divided about my choice of maintaining him as the treasury manager after finding out who he was and his past."
Sestagali assured investors: "All funds in wonderland are managed by a multi-sign, any fud [FUD = fear, uncertainty, and doubt] related to that needs to be cut off now, as they are secured by me and the wonderland team. buyback will still happen and the team is working on deploying the products that we have mentioned it would need to be deployed."
But the damage seems to have been done and the impact should be significant judging by the reactions on social media.
The revelation could have a contagion effect, diminishing the value of multiple stablecoin assets for example, according to Coindesk.
But these revelations will above all amplify the mistrust of the general public and regulators vis-à-vis the crypto space.
