(NYTIMES) - For months, cryptocurrency enthusiasts poured hundreds of millions of dollars into a project called Wonderland, which claimed to provide a system of exchange for the murky world of decentralised finance.

To take part in the project, the investors - who called themselves Frog Nation - entrusted their money to Wonderland's treasury manager, a crypto developer whom they knew only by the profile name of 0xSifu.

In late January, 0xSifu was revealed to be an alias for Michael Patryn, who had served 18 months in federal prison for fraud. The price of the Wonderland token, $TIME, crashed overnight as Frog Nation's panicked denizens debated shutting down the project.

"I was like, 'Oh, man, this is going to get ugly,'" said Mr Brad Nickel, a Wonderland investor in Florida who runs the crypto podcast Mission: DeFi.

From its inception, the crypto industry has been built on anonymity. Bitcoin was conceived more than a decade ago by a mysterious figure who went by the pseudonym Satoshi Nakamoto.

For years, thieves and drug dealers have used cryptocurrencies to do business in the shadows.

The ability to operate anonymously is a central tenet of crypto technology. All cryptocurrency transactions are recorded on decentralised ledger systems called blockchains, which let users transact namelessly without registering a bank account or interacting with traditional financial gatekeepers.

Now as crypto transforms into an increasingly mainstream industry, even the ostensibly legitimate actors - start-up founders, engineers and investors - insist on anonymity. A growing number of crypto entrepreneurs, many of whom control hundreds of millions of dollars in investor funds, conduct business via mysterious Internet avatars scrubbed of identifying information. Some venture capital firms are backing founders without ever learning their real names.

But the near collapse of Wonderland is forcing a reckoning over whether this culture of anonymity undermines accountability and enables fraud. Last month, BuzzFeed News set off a fresh round of debate by identifying two of the pseudonymous founders of Bored Ape Yacht Club, a US$2.5 billion (S$3.4 billion) collection of non-fungible tokens, the unique digital collectibles known as NFTs.

"This pseudonymous stuff is so dangerous," said Mr Brian Nguyen, a crypto entrepreneur who used a pseudonym last year before making his identity public. "They could be a good actor today, but they could turn bad in two or three years."

In interviews, anonymous crypto entrepreneurs and engineers offered a variety of reasons for concealing their names. Some feared that a regulatory crackdown could put them in the cross hairs of law enforcement. Others said they disliked the attention or worried that their growing wealth could make them targets for thieves and hackers.

The nameless entrepreneurs often take extreme steps to keep their identities private, using voice-altering software on calls or requiring business partners to sign non-disclosure agreements.

Wonderland was established last September by Mr Daniele Sestagalli, a crypto entrepreneur who managed the project with Patryn, using whimsical imagery from Alice's Adventures In Wonderland to entice investors. In a January blog post, Mr Sestagalli said he had known since December that Patryn was a former fraudster but decided not to take action because he believed in "second chances".

Patryn's identity may have remained secret if not for the work of an influential crypto sleuth, who tweeted screenshots of a text conversation he had with Mr Sestagalli. In those messages, the Wonderland founder appeared to acknowledge 0xSifu's real name.

Last month, the sleuth was at it again, tweeting evidence that an anonymous leader of another crypto project had once been fined by the Securities and Exchange Commission.

The sleuth's name? Unknown. He uses a pseudonym.