Who Is Daniele Sestagalli?

Final week, it emerged that Daniele Sestagalli, the founding father of several current DeFi protocols and de facto leader of the “Frog Nation,” had been conscious that the treasury manager of his Wonderland Money venture had patchy—certainly, prison—history. On discontinuance inspection, it would appear that quite a variety of Sestagalli friends delight in had their a part of scuttle-ins with authorities.

An Admission

On Jan. 27, on-chain analyst and self-proclaimed detective running underneath the pseudonym zachxbt made a sinful revelation on Twitter. In a series of screenshots that purport to label non-public messages between zachxbt and Daniele Sestagalli—the founder or key public resolve within the motivate of such DeFi phenomena as Abracadabra Money, Popsicle Finance, and the now deeply-beset Wonderland Money—wherein Sestagalli appears to be like to manufacture stunning admission.

“I stumbled on something moderately abnormal about that,” writes zachbxt within the screenshot.

The response, purportedly from Sestagalli, came motivate: “About dubai?” they write.

“About Sifu,” zachbxt answered, referring to Wonderland’s treasury manager. 

“Oh sheet,” Sestagalli appears to be like to reply, “What’s up[?]”

“Properly,” writes zachbxt, “he’s the Quadriga man.”

“Sestagalli” responds: “I cannot verify,” he writes, earlier than persevering with, “But I delight in thought of this plenty.”

Speedily forward to a 2nd screenshot, and the resolve zachbxt claims to be Sestagalli appears to be like to all nonetheless verify the suspicion: “yea is a self-discipline within the PR…” they write; “Alex my accomplice knowledgeable me.”

Thus it used to be printed to the realm that the just identity of Wonderland’s pseudonymous treasury manager 0xSifu used to be in reality Michael Patryn, a serial scammer, stale convict, and co-founding father of collapsed Canadian cryptocurrency alternate QuadrigaCX. 

Fallout

The revelation shook Wonderland’s otherwise upbeat and absorbing neighborhood to its core. 

QuadrigaCX made world headlines in leisurely 2018 when its CEO Gerald Cotten allegedly died at some level of a budge to in India, leaving roughly $169 million belonging to 115,000 customer chilly wallets inaccessible. 

Following the incident, the agency’s co-founder Michael Patryn used to be identified as Omar Dhanani, a serial prison who spent 18 months in U.S. federal penal complex on conspiracy to commit credit-and-bank card fraud in 2005, and burglary, sizable larceny, and computer fraud in 2007.

To veil his prison previous, Dhanani changed his title twice; once from Omar Dhanani to Omar Patryn in 2003, and then from Omar Patryn to Michael Patryn in 2008. Following QuadrigaCX’s crumple, Patryn fleet vanished from the crypto scene—most productive to now manufacture a sizable reappearance as 0xSifu, the nameless manager of Wonderland’s $700 million treasury.

Following the disclosure, Sestagalli printed a assertion confirming the allegations. “To summarize what has took station,” he wrote, “phrase came out that Sifu who has been working the Wonderland Treasury, beforehand used to be a co-founding father of QuadrigaCX, and has had other occurrences within the previous.”

As a replace of at the moment distancing himself from Patryn, Sestagalli admitted that he had identified about his staunch identity for approximately a month and deliberately determined towards ending the connection. “I stumbled on out about this 1 month ago,” Sestagalli admitted, adding, “I’m of the thought of giving 2nd possibilities, as I delight in mentioned on Twitter.” 

1/ Recently allegations about our crew member @0xSifu will fade. I desire all people to know that I used to be responsive to this and determined that the previous of a particular person doesn’t resolve their future. I utilize to payment the time we spent along with out radiant his previous more than the relaxation.

— Daniele by no method asks to DM (@danielesesta) January 27, 2022

Judging by the comments underneath Sestagalli’s preliminary Twitter thread, this path of action didn’t fare effectively with the Wonderland neighborhood. The records came amid an ongoing PR crisis for the venture, whose native rebase token, TIME, used to be already trading at file lows and below its supposed backing label.

To manufacture things worse, an mature interview from December 2020 wherein Sestagalli fleet discusses the Quadriga incident resurfaced and began circulating on Twitter. In it, Sestagalli jokingly acknowledged: “The Quadriga fable will come motivate guys, I’m telling you. Within the slay, something will reappear on Quadriga.”

Despite this assertion likely being nothing nonetheless an uncomfortable series of words and pure accident with regards to the recent dispositions, it used to be satisfactory to trigger an avalanche of rumors and conspiracy theories touching on Sestagali’s just procedure. 

The TerraBitcoin Membership

On the identical day that zachxbt printed 0xSifu’s just identity, the Italian investigative journalist Nicola Borzi wrote a Twitter thread and shared several screenshots of what appears to be like to be to be a discussion touching on the $25 million Popsicle Finance hack that took station on Aug. 4, 2021.

1 – On the night of August 4th 2021 #Popsicle platform acknowledged it had been “hacked”. On that event, on a secret Telegram chat, #TerraBitcoin, who hids a neighborhood of crypto investors, mostly Italians, managed by Paolo #Barrai, there used to be a dialogue among the investors

— Nicola Borzi (@nicolaborzi) January 27, 2022

In accordance with Borzi, the screenshots fabricate from a non-public Telegram channel belonging to an uncommon membership for mostly Italian crypto investors called TerraBitcoin, managed by Paolo Barrai, a man with apparently deep connections inner the Italian crypto neighborhood.

The screenshots label a member using the alias “Merlin” saying:

“Bitfinex used to be hacked on Aug. 2, 2016. It gave the look of the stop of the realm, nonetheless thanks to the hack we become stronger because many wise other folks helped us and delight in turn out to be our companions. Paolo used to be one of them. I met Daniele twelve months ago, Paolo launched us. Daniele has wide skills, the courage of a lion, and a sizable heart, I’m obvious he’ll put collectively to come out of this brutal 2nd even stronger.”

Clarifying to the neighborhood precisely who the particular person within the motivate of the Merlin username used to be, Barrai is seen saying: “for folk who didn’t receive it we have with us the buddy Giancarlo Devasini.” For the uninitiated, Giancarlo Devasini is the CFO of Bitfinex, once the largest cryptocurrency alternate on this planet and at label the issuer of the largest stablecoin obtainable on the market, Tether.

Devasini has long been identified to undertake the alias “Merlin” or “Merlin the Wizard” in many of his communications—they also wait on as his Skype and Telegram handles. Coincidentally, one of Sestagalli’s DeFi initiatives, Abracadabra Money, makes repeated references to the identical mythological wizard all over their Medium posts and technical paperwork. The venture’s core Twitter fable, which is supposedly operated jointly by the venture’s pattern crew—is dubbed 0xMerlin.eth.

To manufacture things fundamental more attention-grabbing, on December 8, a lower than excellent Tether and Bitfinex critic going underneath the username Bitfinex’ed on Twitter shared screenshots that look like from the identical chat in TerraBitcoin’s Telegram neighborhood. There, Devasini is allegedly seen revealing plans for launching a hybrid stablecoin designed to keep some distance from the dangers of conserving trim sums of USD by the stop of the year. 

Oddly satisfactory, Sestagalli’s Abracadabra Money venture is simply that. It’s a decentralized lending platform that uses curiosity-bearing tokens as collateral to mint USD-pegged stablecoins named Magic Net Money. Bitfinex used to be also the first centralized cryptocurrency alternate to checklist MIM as a unfriendly forex.

Bitfinex’s lack of transparency and approved troubles are likely to be no longer any secret. Handiest remaining year, the conserving company of Bitfinex and Tether, iFinex, reached a settlement settlement with New York Lawyer Routine Letitia James wherein the corporate used to be compelled to reside operations in New York on the grounds that it had deceived clients by overstating reserves and hiding roughly $850 million in losses.

(Interestingly satisfactory, every QuadrigaCX and Bitfinex aged Crypto Capital Corp for their price processing. Now defunct, Crypto Capital used to be a shadow bank for crypto companies scuttle by Ivan Manuel Molina Lee. The Polish authorities arrested Lee on accusations of cash laundering and involvement with a world drug cartel in 2019.)

Paulo Barrai, the financial consultant who allegedly launched Sestagalli to Devasini, also appears to be like to delight in had troubles with the regulation. In 2013, he used to be fined €70,000 by the Italian securities regulator Consob for breaking investment disclosure duties. 

The community expands from there. Being the founding father of TerraBitocoin, the “non-public and confidential membership with out spending a dime other folks and investors,” Barrai is also within the enterprise of organizing crypto-centered conferences. In 2019, he organized a crypto conference in Lugano with seven speakers, one of them being Zhao Dong, founding father of Chinese language crypto alternate Renrenbit and a trim shareholder in Bitfinex who, in March remaining year, pleaded responsible to laundering $480 million for on-line casinos using cryptocurrency. 

One other one of the necessary speakers used to be Lars Schlichting, the CEO of Poseidon Neighborhood, a conserving company controlling Eidoo, a crypto startup primarily based by Natale Ferrara. Ferrara, in turn, is a co-founding father of the crypto investment company Blockchain Invest with Paolo Barrai.

Barrai’s Blockchain Invest is one of the necessary companies that had invested in Zulu Republic, a failed crypto startup co-primarily based by Sestagalli motivate in 2016. Having allegedly identified Sestagalli for a whereas, Barrai also invited him to relate as an knowledgeable on decentralized finance at his 2021 conference in Dubai.

The Camponovo Connection

Daniele Alekos Aldo Sestagalli first confirmed up within the crypto enterprise around early 2018 along with his Zulu Republic blockchain venture. Sooner than turning into Zulu Republic, the agency used to be called Zulu Mobility Technologies, headquartered in Serafino Balestra 6 in Chiasso, Canton Ticino, Switzerland.

In accordance with the Swiss Central Trade Registry, Zulu Mobility Technologies used to be co-primarily based by Sestagalli, Oliver Camponovo, and Ibex Capital—an accounting agency then owned by Camponovo. The agency used to be building a mobile utility that used to be supposed to revolutionize the taxi service in Switzerland, equivalent to Uber.

In accordance with a 2017 interview, Sestagalli met and partnered with Camponovo because he used to be an knowledgeable in taxation and endeavor capital. “I met Stefano Barone [another co-founder of Zulu], an instance of a successful entrepreneur succesful of undertaking initiatives to the stop, and Oliver, an knowledgeable on this planet of taxation and endeavor capital. So we started,” Sestagalli knowledgeable the LiberaTV newspaper.

Across the identical time, in 2017, Camponovo used to be convicted within the first event and sentenced to three years in penal complex for money laundering, falsification of paperwork, and violations of the regulation on foreigners: deceiving the authorities in obtaining location permits. He used to be convicted along with Giulio Martino, a excessive-ranking member of Italy’s most notorious crime household, the ‘Ndrangheta, and the financial broker Franco Longo, dubbed the “mafia’s banker,” and sentenced to five and a half years. 

On Jan. 13, 2022, five years after first being convicted, Camponovo used to be acquitted on the money laundering charges by Italy’s Court docket of Appeals. The case has been returned to the Criminal Court docket of the first event in narrate that Camponovo will also be tried again, nonetheless just for minor offenses.

In accordance to the federal prosecutor responsible of the case, Camponovo used to be “the director of the prison action, which he himself had conceived and implemented, making all his records, records and contacts with Swiss and international banks on hand to the prison association.”

As segment of the “Renewal” operation, the Swiss authorities confiscated quite a variety of properties, along with an station of work building on the boulevard By technique of Giuseppe Motta 10 in Chiasso, owned by Martino (50%), Long0 (40%), and Camponovo (10%). Coincidentally, several crypto firms had their headquarters within the identical building, along with Natale Ferrara’s Eidoo, Poseidon Neighborhood portfolio company Digital Identification, and Cryptolab AG, which owns Paolo Barrai’s crypto consultancy agency BigBit. Camponovo’s company Ibex Capital used to be also registered within the identical building. 

Interestingly, Zulu Republic isn’t the finest agency that connects Sestagalli to Camponovo. In accordance with Trade Display screen records, Sestagalli is at label a call-maker in three companies: Zulu Republic, DAAS, and DZent & Partner. Sooner than transferring from By technique of Serafino Balestra 6 in Chiasso (the identical address the place Zulu used to be registered) to Zug, DAAS made Camponovo’s company Ibex Services SA its “care of” postal recipient. 

DZent & Partner, on the other hand, is a agency that has Zulu Republic listed as a accomplice, Sestagalli as a CEO, and Anatol Lüthi as a Partner and Manager. Anatol Lüthi used to be a stale CFO of Zulu Republic, one of the necessary founding board members of Utopia Genesis Foundation, and sits on the board of administrators on Ibex Services SA.

Utopia Genesis is a Switzerland-primarily primarily based company working to manufacture a blockchain framework for the music enterprise. In 2021, Daniele Sestagalli become Utopia’s Chief Intention Officer after leaving the failed Zulu Republic venture. This used to be, in reality, Sestagalli’s remaining more “mature” entrepreneurial endeavor earlier than founding several rather trim protocols in decentralized finance.

The Firm You Settle

Daniele Sestagalli constructed a title for himself within the decentralized finance dwelling by, among other things, propelling a populist, anti-centralization, and anti-endeavor capital story. The Frog Nation’s whole shtick is building DeFi that is anti-VC and “anti suits.” But judging by his previous actions, Sestagalli adopted that story most productive these days. He it sounds as if had no self-discipline wearing a swimsuit most productive a few years ago whereas quiet being Zulu Republic’s CEO.

Moreover, Sestagalli’s decision to entrust a convicted serial prison with managing a $700 million treasury—even after checking out his staunch identity—raised many eyebrows inner the neighborhood. On Sunday, he called for Wonderland to wind down due to divisions within the neighborhood, no topic 55% of the TIME token holders vote casting towards it.

No topic what occurs to Wonderland, Sestagalli’s recognition has taken a vital hit. His previous affiliations with other folks both supposed to delight in committed or convicted of financial crimes absolutely won’t abet salvage it.

Disclosure: At the time of writing, the creator of this feature held ETH and several other cryptocurrencies.