A Twitter sleuth has outed DeFi protocol Wonderland’s co-founder and treasury manager, who goes by the handle “0xSifu,” as Michael Patryn, the surviving co-founder of defunct Canadian cryptocurrency-trading platform Quadriga. Quadriga’s 2018 collapse cost investors at least $169 million. Wonderland’s other co-founder, Daniele Sestagalli, posted a statement saying he knew about Patryn’s past, but kept him on because he is “of the opinion of second chances.” Here’s what you need to know:

Who’s Michael Patryn?: Patryn was involved in Quadriga from its creation in 2013 until 2016. In 2005, he was convicted in the U.S. on a charge related to an online money-laundering scheme under his prior name, Omar Dhanani, according to a report on Quadriga by the Ontario Securities Commission. In 2019, Bloomberg reported he had changed his name and reinvented himself as a Bitcoin entrepreneur after the U.S. deported him to Canada following an 18-month sentence in federal prison.

What’s Wonderland?: Launched in 2021, Wonderland is what’s known as an “Ohm fork”—an experimental attempt to re-create the monetary system. Wonderland’s treasury holds a basket of cryptocurrencies that it uses as a reserve in an effort to keep its token, called Time, at a stable value without interacting with the conventional monetary system. Detractors have criticized Ohm forks as “Ponzi tokens” because of their massive yields coming from value speculation. On Jan. 15, Wonderland had US$767 million in total value locked in smart contracts on the platform, according to data from DefiLama. That has since plunged to less than US$150 million, amid a broad crypto sell-off as well as the revelation about Patryn’s involvement; its token lost half its value in the 24 hours after he was identified, though it has since made back some of that ground. According to Sestagalli’s post, Patryn will step down as treasury manager until the Wonderland community votes to reinstate or replace him.

Why’s this a big deal?: OSC chair Grant Vingoe has said Quadriga was an inspiration for Canadian securities regulators’ March 2021 decision to crack down on the cryptocurrency-trading platform industry, requiring firms in the sector to register as securities dealers. Registered investment dealers have to disclose information about the people running them, a safeguard that’s meant to prevent situations like Wonderland’s, where a known white-collar criminal is put in charge of client funds. This system is far from foolproof—a 2017 investigation by The Globe and Mail found 11 per cent of individuals sanctioned by securities regulators reoffend, often by moving to a new jurisdiction. But unregistered crypto protocols like Wonderland don’t even have that level of oversight, leaving them prone to hacks and fraud.