QuadrigaCX co-founder earned $760,000 from UST collapse

The co-founder of the bankrupt Canadian exchange QuadrigaCX, Michael Patrin, took advantage of the decline of the algorithmic stablecoin TerraUSD (UST) and earned about $760,000. PeckShield researchers found this.

On May 10, amid a correction in the cryptocurrency market, UST lost its peg to the dollar. The stablecoin traded below $0.62.

According to transaction analysis, Patrin, known on Twitter by the handle 0xsifu, swapped about 2.8m USDT for about 3.88m UST when the latter’s price was near its minimum — $0.72.

#PeckShieldAlert @0xSifu swapped ~2.8m $USDT to ~3.88m $UST when $UST dropped to $0.72. Currently, $UST has rallied to $0.91 within 4 hours, total swapping value of ~$3.5m pic.twitter.com/yaLntFHjWP

— PeckShieldAlert (@PeckShieldAlert) May 10, 2022

Within a few hours, UST recovered to around $1. The trader sold 3.88 million UST for 3.56 million USDT. The profit from the trades amounted to about $760,000. Some of the funds he sent to the Avalanche network.

#PeckShieldAlert @0xSifu swaps 3.88m $UST to 3.56m $USDT (Profit ~$750k) and bridges 100k $USDT to Avalanche pic.twitter.com/Y7XXHohZGa

— PeckShieldAlert (@PeckShieldAlert) May 10, 2022

In January, the Wonderland community learned that the project co-founder under the alias 0xsifu was Patrin. He is believed to be involved in QuadrigaCX’s 2019 collapse, which left users with losses of around $137 million.

Another co-founder of the DeFi project, Daniele Sestagalli, confirmed the identity of 0xsifu. Patrin was the Wonderland treasurer. In the vote on his departure, more than 87% voted in favour.

However, the saga sparked a serious split within the community. The Wonderland token (TIME) collapsed to around $400, whereas its October 2021 high was $10,063. As of writing, the coin was trading near $75 (CoinGecko).

Earlier, Patrin stated that over the past two years he earned more than $80 million from trading and investments.

“I didn’t rob anyone. But who needs facts?”, he added.

Over $80mm of transparent profits from trading and investments in my doxxed wallet. Nobody robbed. But hey, who needs facts ?

— 0xsifu (@0xSifu) April 16, 2022

Against the backdrop of ongoing problems in the Terra ecosystem, one user wrote that if Terraform Labs chief Do Kwon had appointed 0xsifu as treasury manager, he would have fivefold increased BTC reserves through trading, and UST would be overcollateralized.

If Do Kwon had installed Sifu as treasury manager, he would have 5xed their BTC daytrading it and UST would be overcollateralized by now

— fbifemboy (@0xfbifemboy) May 10, 2022

In May, the Luna Foundation Guard boosted its reserve to 80,394 BTC (~$2.43 billion at current rates) to back UST’s stability.

Do Kwon says the required BTC reserves should amount to $10 billion.