The Co-Founder of a Major Cryptocurrency Protocol Is Accused of Being a Serial Scammer

Michael Patryn was forced to step down after his previous crimes came to the surface.
Loukia Papadopoulos
The photo credit line may appear like thisVelishchuk/iStock

Cryptocurrencies are notorious for being the source of frauds like the November Bitcoin scam that forced Instagram users to film "hostage-style videos."

Investors, however, were still shaken to recently find out that the co-founder of multi-billion dollar cryptocurrency protocol DeFi  Wonderland was revealed to be a convicted fraudster, according to CoinDesk. On Thursday morning, blockchain sleuths took to Twitter to announce they had discovered that"Sifu," a core member of DeFi Wonderland's founding team, was actually Michael Patryn. 

A serial scammer

Patryn is believed to be a long-time serial scammer and the co-founder of QuadrigaCX, a failed Canadian cryptocurrency exchange that according to provincial regulators was operating as a simple Ponzi scheme.

“0xSifu is the Co-founder of QuadrigaCX, Michael Patryn,” tweeted zach, a self-proclaimed on-chain sleuth. “If you are unfamiliar that is the Canadian exchange that collapsed in 2019 after the founder Gerald Cotten disappeared with $169m.”

Patryn has allegedly been convicted multiple times. His crimes include computer fraud as well as bank and credit fraud. This, however, did not stop Daniele Sestagalli, the founder of DeFi Wonderland, from working with him despite finding out his true identity one month ago.  

After Patryn's true identity was also revealed online for all to see, Setagalli tweeted the following: “I want everyone to know that I was aware of this and decided that the past of an individual doesn’t determine their future. I choose to value the time we spent together without knowing his past more than anything."

Patryn steps down

This tweet was followed by a statement where Sestagalli revealed how he came to find out Patryn's real identity. He also stated that he had now asked Patryn to step down after further reflection on the matter.

"Now having taken some time to reflect, I have decided that he needs to step down till a vote for his confirmation is in place. Wonderland has the say to who manages its treasury not me or the rest of the wonderland team," wrote Sestagalli.

Although it seems this case has resolved itself, Patryn won't be around to cause any further damage, it does raise a question about the level of anonymity present in the DeFi space. In cases involving fraudsters and scammers, the risks far outweigh the benefits and the space presents itself as a tempting area of involvement for those with previous run-ins with the law. 

Could it be that in the DeFi space just like in real life, transparency is best? 

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