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Frog-gate continues, and Daniele Sesta must be having the worst $TIME of his life

If you thought yesterday’s debacle was rough for Daniele Sesta and the Frog Nation army, today has been a nightmare. And it’s not even lunchtime in Europe as we’re writing this. 

Crypto Banter by Crypto Banter
January 27, 2022
in Breaking News
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If you thought yesterday’s debacle was rough for Daniele Sesta and the Frog Nation army, today has been a nightmare. And it’s not even lunchtime in Europe as we’re writing this. 

For context, check out yesterday’s article, Malice in Wonderland. To get up to speed with the latest revelations, read on – a lot has happened in the past few hours.

This all still unfolding in real time, but here’s where the situation stands at the time of publishing:

  • An explosive tweet triggered a further sell-off 
  • Convicted fraudster was controlling treasury funds
  • Daniele’s judgment in the spotlight 
  • Mutiny in the Frog Nation army?

It began with an ominous tweet from Daniele in the early hours of the morning.

1/ 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 (@danielesesta) January 27, 2022

Then, the bombshell.

Wonderland CFO Sifu has been doxxed as allegedly being Michael Patryn, co-founder of the infamously shady crypto exchange QuadrigaCX (not a good look), and a former identity fraudster (real name, Omar Dhanani) who spent two years in jail for his crimes (a terrible look). 

Who exactly is @0xSifu? aka Michael Patryn? aka Omar Dhanani?

I've had the unfortunate pleasure of following this criminal for years. A thread on why we need this guy out.$TIME $WMEMO $SPELL pic.twitter.com/YXV5NckIfX

— MidasTheFool (@MidasFoolsGold) January 27, 2022

And, it seems Daniele had been aware of his partner’s true identity for the past month or so, but nonetheless decided to give him the benefit of the doubt. 

1/ This needs to be shared @0xSifu is the Co-founder of QuadrigaCX, Michael Patryn. If you are unfamiliar that is the Canadian exchange that collapsed in 2019 after the founder Gerald Cotten disappeared with $169m

I have confirmed this with Daniele over messages. pic.twitter.com/qSfWNnQPhr

— ZachXBT (@zachxbt) January 27, 2022

In the context of yesterday’s liquidation cascade (which had left many Frog Nation community REKT) the revelation proved a tough pill to swallow. 

https://twitter.com/dcfgod/status/1486593773471678465

While there’s no evidence as of yet that can either confirm or deny either Sifu’s involvement in the price drop we wrote about yesterday, or any malicious action on his behalf, questions are circulating. One is about allegedly suspicious activity coming from a wallet understood to be Sifu’s. 

Ser can you explain how Sifu's wallet value jumped from 45 mil USD to 445 mil USD in the last month? I really can't figure out what's going on.. honest question. https://t.co/HLs7VHdjOV

— Mario Milsugio (@MarioMilsugio) January 27, 2022

Daniele’s judgment is being widely questioned. And his appeals for understanding from the community appear to be falling on deaf ears. 

IF GIVING A CAT TO WATCH THE MILK IS THE SAME MISTAKE THEN NO I HAVE NOT

— Kҽყʂҽɾ 🔺(🗡 , 🗡) (@DefiKeyser) January 27, 2022

To add insult to injury, prominent voices in DeFi have been speaking out. 

Frog Nation’s very own developer-extraordinaire, Andre Cronje, has pledged his support for Daniele. But he has also suggested his colleague’s error of judgment could be tantamount to “negligence”. 

https://twitter.com/AndreCronjeTech/status/1486607111094255622

Before following up with an even more damning assessment. 

https://twitter.com/AndreCronjeTech/status/1486667374053007361?s=20

Route2Fi, one of the most respected accounts on crypto Twitter, announced he’d lost confidence in the project, and would be selling his TIME holdings at a significant loss. 

Just woke up and saw the situation about Sifu.

I can't be a part of this anymore, so I'm selling my $TIME now (at a loss).

I still believe in the builder Daniele, but I have a hard time seeing $TIME correcting from the events this week.

— Route 2 FI (@Route2FI) January 27, 2022

The community is by no means united in a Daniele witch hunt, though… His reputation in decentralized finance (DeFi) is being battle-tested right now, but Daniele’s reputation for integrity, and track record for community building are well established.

https://twitter.com/CryptoMessiah/status/1486412799865667589

Earlier today, Daniele released a statement on the recent developments at Wonderland. While it didn’t offer much in terms of any concrete steps being taken, Daniele sought to dispel any FUD about Sifu’s opportunity to mismanage treasury funds (“ they are secured” by himself “and the Wonderland team”). He has also “decided that he [Sifu] needs to step down till a vote for his confirmation is in place”. You don’t need to be psychic to predict which way the vote is likely to go!

My statement on Recent Developmens at Wonderland https://t.co/Lq3TK4z1fI

— Daniele (@danielesesta) January 27, 2022

Right now, the Frog Nation and its associated projects are in a state of turmoil.

SPELL is losing its magic. 

https://coinmarketcap.com/currencies/spell-token/

And $TIME holders continue to get REKT. 

Abracadabra all your money disappeared

— Grug 🪨 (@capitalgrug) January 27, 2022

Clearly, this story isn’t about to blow over any time soon. We’ll be following it closely (and keeping you up to speed!).

Banter’s take

This is a bad look for Wonderland. It’s also a bad look for crypto in general. Degens love DeFi. It’s in our DNA. But when things go bad, they can go really bad. We’re operating in an unregulated space, where the kinds of due diligence, insurance, and quality controls you’d find in legacy finance don’t apply. 

The innovation in our industry may be unprecedented (in no small part thanks to Daniele himself!), but it also comes with serious risks. Blindly investing in projects, especially those with undoxxed leadership, is exposing you to potential dangers. 

How this particular drama plays out remains to be seen, and perhaps sentiment will shift towards an overall suspicion of anonymous actors in positions of authority. Meanwhile, it teaches us a valuable lesson: be rigorous in your research, apply scrutiny, never invest more than you can afford to lose, and of course, be careful with leverage (or don’t use it at all!).

Tags: Wonderland (TIME)
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