Data from Etherscan shows that sifu.eth — an address that is believed to be linked to Michael Patryn — has sent 2,000 ETH to Tornado Cash, worth $5.5 million at current rates.
The man at the heart of a DeFi protocol's spectacular collapse has started laundering crypto through a coin mixer.
0xSifu was recently unmasked as Michael Patryn — a convicted credit card fraudster who had spent 18 months in U.S. federal prison. He also co-founded QuadrigaCX, but left the doomed exchange with $190 million in user funds unaccounted for.
Patryn had been serving as the treasury manager for Wonderland, causing a backlash among users. The embattled project is now set to close after a significant number of investors asked to get their funds back in a community vote.
Data from Etherscan shows that sifu.eth — an address that is believed to be linked to Patryn — has sent 2,000 ETH to Tornado Cash in regular batches of 100 ETH. This crypto haul is worth $5.5 million at current market rates.
Tornado Cash is used to obfuscate transaction histories — making it harder for law enforcement agencies to follow the paper trail and track where funds have been. ZenGo's chief technology officer Tal Be'ery told CoinDesk:
"It is impossible to determine with certainty whether the scammer is in control of the address, but given the particular case, it is likely."
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A Huge Setback for DeFi
As we mentioned in our newsletter yesterday, the Wonderland debacle exposes serious questions about the decentralized finance industry — not least the problems associated with protocols led by pseudonymous individuals.
Until 0xSifu was effectively doxxed on Twitter, Wonderland users had no way of knowing that he had been convicted for financial crimes. As SushiSwap member Tyler Benster told Bloomberg on Friday:
"There's huge reputational damage being done by projects like Wonderland to some of the actual innovations of decentralization."
The debacle has contributed to the Bloomberg Galaxy DeFi Index plunging to a record low — a level that has not been seen since it launched back in August 2021.
Separately, data from DeFiPulse.com shows that the total value locked in decentralized protocols has now plunged to $80.64 billion — a fall of 28% from the all-time high of $112 billion that was set in November. This is arguably unsurprising given how ETH has retraced by 43% over this same period.
