pirate returned people's money on request at first, too (although he discouraged withdrawals by telling people that if they withdrew they may not be able to re-invest later).

Kraken was clearly designed for Patrick to hedge his own risk (and ultimately to dump his own toxic debt).  Just because you don't cut and run at the first opportunity doesn't mean you're not going to cut and run eventually.  My perception is that Patrick thought his experience in high-risk investments meant he'd come out ahead of the game and that the decision to "cut and run" was probably not made until it became obvious that he was so far behind the game that he couldn't catch up.