28 Jan 2022 · 3 min read

Alts Related to Avalanche App Developer Hit by Volatility as Ties to QuadrigaCX Co-Founder Revealed

Source: iStock/ryasick

 

The price of tokens associated with Daniele Sestagalli, a developer of several Avalanche (AVAX)-based applications, were hit by volatile trading over the past 24 hours as ties between Sestagalli and a convicted felon were revealed.

Among the projects associated with Sestagalli are Wonderland (TIME), Popsicle Finance (ICE), and Abracadabra.Money (SPELL). All of the tokens have seen heavy selling recently, before losses were trimmed during early US trading hours on Friday.

As of 16:10 UTC on Friday, TIME was up by 8% over the past 24 hours, SPELL was down 4%, while ICE gained almost 10% after having dropped by 62% over the past 7 days.

The choppy trading occurred after it was revealed that Wonderland’s pseudonymous co-founder ‘Sifu’ is Michael Patryn, a convicted felon in the US and co-founder of the now-defunct Canadian crypto exchange QuadrigaCX.

QuadrigaCX made headlines around the world back in 2018 when it was reported that its CEO, Gerald Cotten, had died during a trip to India. According to the exchange, Cotten was the only person who had the exchange’s private keys, which could have given access to over USD 190m worth of customer funds held on the exchange.

However, alternative theories about Cotten’s disappearance spread online, with some appearing to doubt the official version of the story.

Quadriga’s co-founder was Michael Patryn, who it has now been revealed is Wonderland’s co-founder ‘Sifu.’ Patryn was formerly known under the name Omar Dhanani, and is a convicted felon who spent 18 months in prison in the US for credit-and-bank card fraud in 2005, Bloomberg reported on Thursday.

“Today allegations about our team member @0xSifu will circulate. 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,” Daniele Sestagalli wrote on Twitter yesterday.

As the ties between Sestagalli and Patryn became known, concerns also started to linger about Magic Internet Money (MIM), a dollar-pegged stablecoin issued by Abracabadra Money, potentially losing its USD 1 peg.

The coin is known as one of the largest so-called algorithmic stablecoins, meaning it is not backed by US dollars in reserves, but instead uses algorithms in an attempt to maintain a stable value. 

As of 16:10 UTC, MIM traded at USD 0.99, after recovering from a dip as low as USD 0.93 earlier in the day. It is ranked 36th by market capitalization (USD 3.87bn) on Coingecko. 

Sestagalli, who is a notable figure in the decentralized finance (DeFi) space, also made headlines back in December last year when he proposed a takeover of the SushiSwap decentralized exchange.

On Tuesday this week, Sestagalli announced on his blog that SushiSwap has now become part of his own ‘Frog Nation’ collective, saying he aims to “clean up and bring efficiency back into Sushi.”

Following the controversy surrounding Sestagalli over the past few days, however, some of Sushi’s community members have voiced concerns over the influence the DeFi developer has over the project.

“Frog Nation leaders [have] reputational issues and questionable management choice in other ventures being worked on,” one community member said. He added that a new group made up of “multiple stakeholders” that can be trusted by investors, developers, and the larger community, is needed to manage the project.
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Learn more: 
- Chaotic QuadrigaCX’s Finances Might Leave Traders Almost Out Of Pocket
- QuadrigaCX Users Want to Dig Former CEO Out, Literally

- Crypto Security in 2022: Prepare for More DeFi Hacks, Exchange Outages, and Noob Mistakes 
- DeFi Trends in 2022: Growing Interest, Regulation & New Roles for DAOs, DEXes, NFTs, and Gaming