All Hell Breaks Loose, This Avalanche Project Main Dev Was Behind A Ponzi Scheme?

The Avalanche community has seen its fair share of drama in the past days as Wonderland (TIME) hit a new price low. Data from CoinGecko indicates that the token has lost over 90% of its value since November 2021.

Related Reading | Hackers Are Now Using Compromised Cloud Accounts To Mine Crypto

The Avalanche token was priced close to $10,000 and has been on a downtrend since that period reaching $406, as of press time. TIME has been one of the worst performers in the DeFi sector and could see further losses in the short term.

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Wonderland Time Avalanche
TIME on a downtrend since November 2021. Source: Coingecko

According to a pseudonym investigator, Wonderland’s CFO known as OxSifu is the co-founder of QuadrigaCX, a former Canadian-based crypto exchange, Michael Patryn. This platform collapsed in 2019 shortly after its founder Gerald Cotten runaway with over $169 million.

Per a report published by the Ontario Securities Commission, QuadrigaCX was created from “fraud”. The crypto exchange and its founder promised their clients that their assets will be safe. However, the Canadian authorities discovered that “Cotten spent, traded, and used those assets at will”.

The pseudonym investigator decided to reveal the information related to Sifu due to TIME’s recent price action, and its implication for the inventors on the Avalanche project. He said the following via Twitter after sharing screenshots of a conversation with the founder of Wonderland, Daniele Sestagalli:

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I never would have expected this but cannot sit on it any longer especially after the events experienced earlier this week with TIME.

In addition to the crypto exchange QuadrigaCX, Patryn was allegedly tied to an “identity theft ring” known as “Shadowcrew”. According to the investigator Patryn “plead guilty” to his ties with this illegal group.

In their report, the Canadian authorities are unable to establish a connection between Patryn and the fraudulent behavior displayed by its founder. The OSC claims Patryn was involved with the QuadrigaCX until 2016, after that:

Patryn ceased to be associated with Quadriga after 2016 and that the majority of client funds were deposited with Quadriga after Patryn’s departure. Based on the evidence we reviewed, Quadriga did not maintain proper accounting records from 2016 onward.

Avalanche Project CFO, An Old Time Fraudster?

Despite this report, Tay Vano CEO at crypto managing service MyCrypto shared the results of an investigation, conducted by independent reporter Amy Castor, that ties Patryn to the failed crypto exchange, and other Ponzi schemes. In 2019, according to images shared via her Twitter account, the Avalanche project CFO made ETH transactions that could directly link him to Quadriga.

Patryn’s record of alleged fraudulent activities has been tracked back to Midas Gold, an exchange that operated between 2008 and 2013 until it was shut down, BlackHatWorld and TalkGold. The latter operated in 2003 as a forum to “push high yield investment programs” or Ponzi schemes.

Moreover, the same investigation suggests Michael Patryn changed his name from Omar Dhanani until he met Cotton. Patryn apparently was released from a U.S. federal prison back in 2007 after serving an 18-month sentence related to his involvement with “Shadowcrew”.

Related Reading | Restores Withdrawals After Reportedly Losing $15m To Hackers

Due to this long history of fraud, and illicit schemes involvement, some believe the founder of Wonderland has put his “reputation on the line”. Sestagalli shared a vote to remove Sifu/Patryn from his position as Wonderland’s treasury manager after sharing a long statement on recent events. Daniele said:

I found out about this 1 month ago, I am of the opinion of giving second chances (…). I have learned to give trust to people and to make my own opinions about them rather than just listen to the noise (…). I hope the community now comes together and decides what the future looks like and who they want managing their money.


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Avalanche recovers from Evergrande-led selloff as AVAX rebounds over 30%

Avalanche (AVAX) prices recovered on Sept. 22, paring a portion of losses that hit cryptocurrencies at the beginning of this week, led by worries about potential contagion in China’s housing market.

The AVAX/USD exchange rate surged by as much as 12.05% to log an intraday high at $66.08. The pair’s gains came as a part of an interim rebound that started Tuesday after it bottomed out locally at a local low of $50.68. As a result, AVAX’s net rebound stretched by up to 30.37%.

Cointelegraph VORTECS™ Score also flipped bullish ahead of the Avalanche token rally. 

AVAX price vs. VORTECS™ Score. Source: Cointelegraph Markets Pro

The VORTECS™ Score is an algorithmic indicator comparing historical market and social conditions around each coin to those currently observed. Exclusively available to subscribers of Cointelegraph Markets Pro, each asset’s VORTECS™ Score indicates whether the present combination of the coin’s market and social metrics is historically bullish, bearish, or neutral.

As shown in the chart above, the asset’s VORTECS™ line turned green (corresponding to values above 66) on Sept. 22 against a price of $61.22. Later, AVAX logged sizable gains.

Avalanche raises $250M

On Monday, the Avalanche token had fallen by 18.18% to $57.34. Its losses imitated concerns across the global market as investors weighed the downside risks coming from the Evergrande debt crisis. As a result, all the major cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), fell in sync with global stock bourses.

The performance of top 15 crypto tokens on a 24-hour adjusted timeframe. Source:

The bearish shock in the Avalanche market came despite its healthy fundamentals. In detail, AVAX/USDT had surged to a new record high at $77.37 (data from Binance) on Sunday, days after raising $230 million in an AVAX sales round led by Polychain and Three Arrows Capital.

Avalanche’s funding came against the backdrop of its top rival Ethereum’s ongoing network issues, including bandwidth congestion and higher transaction fees. The young blockchain project, which claims to process over 10,000 transactions per second (tps) compared to Ethereum’s 13 tps, already has more than 270 projects building atop its public ledger, including Tether, SushiSwap, Chainlink, Circle, and The Graph.

“AVAX aims at a new price discovery above $100 in the medium to long term,” said Gustavo De La Torre, Business Development Director at, in a statement to Cointelegraph.

“The growth potential can be supported by the fundamental utility, which presents it as a major competitor to the Ethereum blockchain as a smart contract hub.”

Bearish technicals

Despite its recovery, the AVAX/USD rate rally may reach a point of exhaustion as it forms a textbook bearish pattern.

Dubbed as Rising Wedge, the structure appears when the price consolidates between upward sloping support and resistance trendlines looking to converge at a later point. Rising Wedges are usually bearish reversal patterns, with price targets located at a length equal to the structure’s maximum height.

Related: DeFi platform Vee Finance exploited for $35M on Avalanche blockchain

Avalanche prices appear to have been fluctuating inside a Rising Wedge pattern. As a result, the maximum net distance between the structure’s upper and lower trendline comes to be $19.51. 

AVAX/USD daily price chart featuring Rising Wedge setup. Source:

Depending on the breakout point, the AVAX/USD’s Wedge target could be $19.51 below. The chart above assumes two breakout levels based on their historical significance as support and resistance. As a result, Avalanche risks falling anywhere between $42.30 and 58.69 in the coming sessions.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.