Abracadabra: Two Wallets Voted to Shut a Crypto Lender That Once Held $6.4B

At 09:01 UTC on 14 October 2026, a crypto wallet cast 100 million votes to shut down Abracadabra, a lending service that had once held more than $6 billion of other people's money. Seventy-seven seconds later a second wallet added 296 million votes. That second wallet belonged to Abracadabra itself: Etherscan, the public record of the Ethereum network, labels it "Abracadabra.Money: MIM Treasury Wallet". Nobody else voted. When the poll closed at 10:09 UTC on 15 October, the count was 396 million for and none against.

Whether that is a win depends on whose rules apply. The voting site, Snapshot, still demands 3 billion votes and, according to the crypto news site Protos, shows the proposal as rejected. The proposal had written its own, lower bar into its text, and by that bar it passed. Protos reported the shutdown as approved on 21 October.

The numbers left to vote on were small. DefiLlama, a public service that tracks deposits across crypto, put the money in Abracadabra at a peak of $6.42 billion on 5 January 2022. On 24 October 2026 it was about $4.7 million. The proposal says about 22 million MIM, the protocol's digital dollar, is held by the public, against about $900,000 of "actionable backing". Holders are offered about 4 cents for every dollar. The rest, about $21 million, is bad debt.

What Abracadabra was

Daniele Sestagalli founded Abracadabra in 2021. He was also behind Wonderland and Popsicle Finance, a family of projects whose fans called themselves Frog Nation. The idea worked like a pawnbroker that pays out in its own banknotes. A user deposited crypto into a vault, which Abracadabra called a Cauldron, and borrowed MIM against it. MIM, short for Magic Internet Money, is a stablecoin: a digital dollar meant to stay at $1. Its value rests on the collateral behind the loans. When a loan cannot be repaid and the collateral does not cover it, the shortfall is bad debt, and the MIM that loan created is left with nothing behind it.

The project was run as a DAO, a decentralised autonomous organisation, which has no board. Decisions go to a governance vote, a shareholder vote in which tokens are the shares. Abracadabra's voting token is SPELL. The money in the vaults, which crypto calls TVL (total value locked), is the equivalent of assets under management.

By January 2022 about 3.6 billion MIM was in circulation, according to DefiLlama. Then the trouble started. On 27 January the on-chain investigator ZachXBT revealed that 0xSifu, the treasury manager of Wonderland, was Michael Patryn, a co-founder of QuadrigaCX, the Canadian exchange that collapsed in 2019. Sestagalli admitted he had known. Abracadabra's deposits fell from $4.47 billion to $3.59 billion in two days. In May 2022 Terra's UST stablecoin collapsed. Abracadabra's DegenBox strategy, which let users borrow MIM against UST and buy more UST, had drawn in close to $1 billion of UST.

©CMZ chart. Data: DefiLlama

Three hacks and a broken peg

The hacks came later. On 30 January 2024 an attacker used a rounding error in Ethereum Cauldrons to borrow about $6.5 million of MIM against almost nothing, and MIM briefly fell to about 76 cents. On 25 March 2025 about $13 million, some 6,260 ether (the Ethereum network's own currency), was taken from Cauldrons tied to GMX, a trading service on the Arbitrum network. GMX said its own code was not at fault. On 4 October 2025 a flaw in old, retired Cauldrons let an attacker walk off with about 1.79 million MIM, roughly $1.8 million, which was swapped for ether and sent through the mixing service Tornado Cash. Each time, MIM was created with nothing behind it. Protos puts the bad debt the three hacks left at $21 million.

On 4 June 2026 a Snapshot vote handed day-to-day control and the treasury, the protocol's bank account, to a group called Anubis. Its listed leaders were Greg Dewitt on operations and the directors Paul Parker and Glenn Kennedy, with Nemesis Trading and Alapin Holdings named as partners and Jack Niewold "expected to serve as Project Lead". Two wallets cast 5.5 billion votes for it. The promise was to "revitalize Abracadabra".

A week later the peg broke. CoinGecko's daily prices show MIM at 99 cents on 11 June and 83 cents a day later. On 24 June the protocol began raising interest rates in every Cauldron to push borrowers to repay, and stopped paying the incentives that kept MIM easy to trade on Curve, the main exchange for stablecoins. By 1 July MIM was worth 11 cents.

©CMZ chart. Data: CoinGecko

The money that moved

Pharos, a service that tracks stablecoin prices, reported that the Ethereum treasury Safe (a shared wallet that needs several keyholders to sign each payment, like a company account with more than one signatory) sold MIM into Curve on 8 and 11 June for about $489,000. On 14 July, Pharos said, Abracadabra-controlled Safes moved about $8.3 million "with no public explanation". About 2,142 ether went to a deposit address tagged to the exchange Binance. About $4.30 million in the stablecoins USDC and USDT went to an unlabelled address that sent it straight on.

On 30 September Mikko Ohtamaa, a co-founder of the analytics firm Trading Strategy, called the pattern "treasury looting". He listed what had not been published: who signed the transfers, any authorisation for the Binance deposit, any receipt. That is his allegation. No regulator or court has ruled on the transfers, and the wind-down proposals do not mention them. Protos asked Niewold for comment and had no reply.

The project's own reasons for closing are set out in the proposal. After "a series of hacks", it says, MIM is "severely under-backed with no viable path back to parity". The new team found the position "far worse than initially expected". Much of the collateral belongs to users who borrowed nothing, so it backs no MIM. About $300,000 sits in an Arbitrum Cauldron whose interest rate can never be changed. Forcing borrowers to repay through higher rates would bring only a "minutes-long" price rise that rewarded the fastest sellers. About $1 million sits in two Cauldrons holding Stargate tokens, which must be withdrawn before 15 December because LayerZero Labs is retiring an older relay system they rely on. Lawyers advised that, with $21 million of bad debt, the protocol should be unwound before users forced it through the courts. Ohtamaa's reply is that the plan counts only collateral left in the Cauldrons, not the July transfers, and that if those were recoverable the payout would be "far above four cents".

How two wallets passed it

The first wind-down vote opened at 05:24 UTC on 29 September. The day before, blockchain records show, the treasury wallet sent the proposal's author 4,139 USDC and 1.31 ether. Within six minutes the author's wallet bought about 100 million SPELL, using that USDC and 2.32 wrapped ether (ether in a standard token form), roughly $10,000 at the day's prices. Those were its 100,047,420 votes for. One other wallet voted 523,446 against. The total, 100.6 million, fell far short of quorum, the minimum turnout, which on Snapshot is fixed at 3 billion. The vote failed.

The refined proposal of 13 October explained why the bar could no longer be met. Only staked SPELL counts as a vote, and it said the votes in existence totalled 1.03 billion. A quorum of three times that "does not make any sense". The keys to change it are held by former team members who are "not reachable". Four months earlier, two wallets had cleared it with 5.5 billion votes for the handover. Now the text declared its own rule: 30% of the votes, or 309,046,858. Protos valued 300 million SPELL at about $26,000. The proposal says that until MIM is repaid, SPELL "does not retain any accounting value".

The treasury wallet supplied about three quarters of the yes votes. Under most countries' company law, shares a company holds in its own treasury carry no vote. Protos also noted that the wallet had gathered about $3 million of wrapped ether in the days before the vote, and that nothing said whether it would count towards MIM's backing. On 24 October it still held about 1,280 wrapped ether, worth about $3 million.