DeFi platform Wonderland has plummeted in value and reputation after it was revealed via social media that the CFO is none other than Michael Patryn, the co-founder of defunct Canadian crypto exchange QuadrigaCX.
- Michael Patryn aka Omar Dhanani aka Oxsifu has been entangled in a variety of financial crimes over the years, but his most infamous is QuadrigaCX, an exchange that ran like a Ponzi scheme before collapsing after the puzzling death of Patryn’s business partner in 2018. This Twitter thread gives a good rundown of the saga.
What happened: Wonderland’s token, TIME, lost 32% of its value after screenshots posted online confirmed that the man in charge of finances known as Oxsifu was actually Patryn.
- The revelation surfaced on Twitter when user zackxbt posted screenshots showing that he had confirmed the identity of Oxsifu with Wonderland co-founder Daniele Sestagalli.
- Sestagalli addressed the issue in a statement, admitting that he has known Oxsifu’s true identity for a month and believed Patryn deserved a second chance.
Through the looking glass: Wonderland is built on Avalanche, an ethereum virtual machine (EVM) compatible blockchain that offers lower fees and faster transactions. It is one of the first decentralized reserve currency protocols, with its TIME token is tied to a basket of other currencies.
- This can offer great yields for investors, but also makes TIME more volatile as its price is tied to other volatile cryptocurrencies.
Why it matters: We all know a crypto winter is forecasted right now, and it looks like Wonderland will suffer some major frostbite with this scandal. After the entire crypto market took a dive over the weekend, Wonderland was hit with a massive liquidation Wednesday that continued into Thursday.
- As of writing TIME is trading at US$287, a remarkable drop from its all-time high of US$10,063 in November of 2021. That’s a 96.9% drop in token value!
The financial exodus is an indicator that despite signs of froth in the crypto makers, investors still care a lot about the integrity of a platform and its team, with many Wonderland users outraged that Sestagalli would knowingly work with Patryn.