Axie Infinity CEO denies insider trading allegations

  • Bloomberg alleges that Trung Nguyen moved $3 million in AXS tokens before the attack on the platform in March.
  • The Axie Infinity CEO says it is discussing possible long-term solutions with Binance to prevent a repeat of the attack.

Trung Nguyen (Axie Infinity CEO and co-founder) denied accusations of being involved in insider trading shortly before the Ronin bridge attack earlier this year. Per an announcement from Sky Mavis (Axie Infinity’s parent firm), hackers stole $600 million in digital assets from the blockchain in March 2022.

However, a Bloomberg report claims that a wallet owned by Nguyen moved almost 50,000 AXS tokens between the period when the attack took place and the official statement about the attack. The report added that Nguyen moved the $3 million worth of AXS tokens from the ronin blockchain to the Binance exchange.

Following the transfer, Sky Mavis paused transactions on the platform, with users’ assets locked in there. Bloomberg report claimed that Axie Infinity owners wanted to secure its tokens and cash out on them before locking down the remaining assets.

The denial

But Sky Mavis responded that the report had no proof. It also said it moved the funds to Binance to stabilize the firm’s finances. Also, moving the funds would enable it to offer liquidity and outsmart anyone intending to profit from the hacker exploit. A Sky Mavis representative revealed that the company understood that it would have better options and positions by having more significant amounts of AXS tokens on Binance.

The representative further said that the team made the transfer from a Nguyen-linked wallet to ensure that short-sellers (tracking Axie wallets) can’t “front-end the news.” The report also claimed that multiple blockchain researchers and experts told Bloomberg that several other wallets linked to Sky Mavis employees also made relatively large AXS transactions at that time.

However, Sky Mavis denied that its employees were involved in such large transactions. Instead, it claimed that its business partners and contractors might have performed such token transfers. Almost immediately after Sky Mavis’s denial, the Axie Infinity CEO also tweeted a denial of the allegations.

In his tweet, Nguyen said Axie Infinity is his life’s work, and his team is already discussing appropriate solutions with Binance. One of such solutions is whether to close the bridge. Also, ways to make user funds available to them again in the shortest time. He reiterated that the allegations of insider trading were utterly false.

Nguyen explained that the funds’ deposits in the Ronin network were from the founders. In the Axie infinity game, users can earn digital currencies by completing tasks like winning Arena battles. They can also use non-fungible tokens (NFTs) for breeding Axie monsters.

Related: Axie Infinity to reimburse Ronin bridge victims and reopen the bridge

Compared to previous attacks in the crypto space, the ronin network attack is one of the largest in crypto history. US government’s law enforcement agencies’ analysis revealed that the notorious Lazarus Group (a group of hackers sponsored by North Korea) was responsible for the ronin network exploit.