Sky Mavis head denied insider trading allegations amid hacking of Ronin's sidechain
Sky Mavis CEO Trung Nguyen called any speculation about the Axie Infinity team's involvement in the insider trading scheme in the immediate aftermath of the Ronin sidechain hack "baseless and false."
Earlier, a blogger nicknamed Asobs published a video in which he accused Nguyen and other company founders of insider trading in AXS tokens.
According to Asobs, 22 hours before Ronin's public announcement of the hack, a wallet owned by Nguyen transferred 48,838 AXS (more than $3.2 million at the exchange rate at the time) to the cryptocurrency exchange Binance.
He noted that other addresses he identified as belonging to Sky Mavis employees also made large transactions during this period.
"Here we see a five-day period during which AXS was growing and the hack had not yet been detected. Then there's the roughly 22-hour window between when Sky Mavis found out about the hack and shut down the network. [...] When we look at the amounts transferred, there is a significant difference between the value moved in those two periods," Asobs wrote.
The blogger explained that he discovered seven wallets associated with Sky Mavis employees. In the five-day period in question, they collectively moved $150,000 worth of assets. However, after the company learned of the hack, those same wallets made $1.15 million in transactions.
Speaking with Bloomberg, company spokeswoman Kali Moore confirmed that the address that moved 48,838 AXS was indeed controlled by Nguyen. She explained that the CEO wanted to bolster the company's liquidity amid the looming crisis and was forced to execute the transaction in a "non-obvious way for the market."
"We understood that our position would depend on the amount of AXS on Binance. More liquidity would give us the ability to use different credit/capital collateral options. The founding team decided to move assets from his wallet to prevent traders who track Axie's official addresses from getting ahead of the market," Moore said.
On Twitter, Nguyen confirmed that the $3 million transfer of AXS to Binance was "part of a plan to provide liquidity." He said that before Ronin Bridge closed, the project team also sent $7.5 million in assets to the exchange "from a well-known multisig wallet."
As a reminder, on March 29, 2022, Sky Mavis reported the hacking of the Ronin sidechain. The developers said that on March 23, attackers took advantage of the vulnerability and withdrew a total of $625 million worth of crypto-assets from the network.
As a result of a phishing attack on one of the company's employees, the hackers managed to gain access to its infrastructure and Ethereum-sidechain validators.
The developers later noted that the attackers used social engineering. The attack took place back in December 2021.
Ronin was relaunched in June, three months after the hack.