Michaël van de Poppe - 23 March 2022
Trouble in Wonderland
Last week, one of the co-founders of Wonderland (token ticker: $TIME) has been doxxed and turned out to be a notorious criminal. Personally, we think this is one of the biggest crypto stories of 2022 and just shows how much of a Wild West this space really is.
It all started with a tweet from ZachXBT on January 27th, who is known for his efforts exposing scammers and malicious actors. In his tweet, he unveils that 0xSifu, the CFO of Wonderland, is actually Michael Patryn, a known criminal with a lengthy ‘career’. The tweet caused a storm of reactions and consequently, the price of $TIME started to plummet as people exited their positions because they no longer wanted anything to do with the project.
Before continuing this story, let us rewind a bit and put this story a bit more into context. Wonderland Finance is a rebase token, a fork of OlympusDAO (fork means modified copy). It was launched at the beginning of September on the Avalanche network. The founder, Danielle Siesta is a well-known figure in the crypto space as he has launched other successful projects in the past such as Popsicle Finance and Abracadabra Money. Users can buy and stake $TIME to receive $wMEMO. Through the practice of (3,3), also known as holding and staking, users enjoy the rebasing rewards and maintain their share in the market capitalization.
The purpose of Wonderland is to accumulate digital assets in their treasury and use that to generate yield for their holders. Initially, the project ran very successfully and close to a billion dollars in treasury assets were accumulated in the Wonderland treasury leading up to their peak.
Yield was generated by pooling those funds in various yield farms hosted on Avalanche. The funds were managed by a multi-sig, meaning multiple people had to give their approval for a transaction to happen. One of those key people was 0xSifu, an anonymous crypto user who was involved with many other crypto projects in the past. Through those involvements, he was respected and trusted in the community, even though he was anonymous. Something that is not uncommon in the crypto space.
Sifu’s true identity
As it turns out, Sifu is in fact Michael Patryn. A man that has a lot of felonies on his name and a man that should not be in control over a treasury of close to a billion dollars. Michael Patryn is one of the co-founders of the Canadian crypto exchange QuadrigaCX which he founded in 2018/2019 with Gerald Cotten. The two used deposited funds to trade for themselves and eventually the exchange collapsed resulting in the loss of over $150mln for their users.
Gerald Cotten went on a trip to India where he mysteriously died and many conspiracies surrounding his ‘death’ are still fluctuating. Patryn managed to evade any legal consequences with millions in his bank account.
Besides QuadrigaCX, Patryn has had other shady businesses. In 2005 he was running an identity theft ring including identity and credit card theft. Back then he operated under the name Omar Dhanani. Eventually, he was arrested and put in jail, after his release he moved to Canada and changed his name to Michael Patryn.
We hope it has become apparent that a man of this caliber should not be in charge of a community treasury that holds multiple hundreds of digital assets.
It did not take long for Sifu to be removed from the team, however, Danielle initiated a proposal for the community to decide to bring him back or not. His reason was that he did not want to judge anyone based on their past. This sounds noble, but in this case unacceptable as Sifu was involved with severe criminal activities.
The drama surrounding Wonderland was detrimental to the project. Many people sold off their position and they are now contemplating winding down the project and redistributing the treasury holdings back to the token holders.
Sifu has been withdrawing funds from his personal wallet to Tornado Cash, a protocol to wash your Ethereum.
This story reflects the current Wild West state of crypto. Many bad actors come into play in this space who are hiding behind their anonymous profile pictures. In this case, it could’ve been far worse. Sifu did not actually harm the project directly. He did not steal funds apart from some questionable ‘salary reimbursements’ he gave himself. Danielle knew his identity for quite some time but decided to keep it for himself. This ultimately hurt the project when ZachXBT revealed Sifu’s real identity to the public.
It is clear that Wonderlands’ time is up.