Mystiko network under fire for suspected insider trading in airdrop

Mystiko Network’s airdrop faces insider trading allegations, prompting an investigation.

There have been claims of insider trading that has made the second airdrop by Mystiko Network, which was meant to reward holders of the vXZK coin, more interesting. There were accusations after some wallets got more airdropped tokens than other users, which caused worry in the cryptocurrency community.

In an X post, blockchain reporter Colin Wu brought these shady actions to light. Wu brought up concerns about the fairness and clarity of the airdrop process by pointing out the use of newly made addresses and large token distributions.

Unusual transactions spark insider trading allegations in mystiko network’s second airdrop

The second airdrop from Mystiko Network was meant to reward people who owned vXZK, which is an ERC-20 version of the XZK governance coin. A picture of vXZK balances taken between June 30 and July 17 was used to decide how to distribute the airdrop. On the other hand, on-chain data showed a strange transaction on July 5: the official Mystiko-Vault Community Incentives wallet sent 20 million XZK tokens to 1,487 newly made addresses using Multisender, an app that lets you send tokens to multiple addresses at once.

Soon after the airdrop, these new addresses got gas funds from big platforms like OKX and Bybit. This suggests that insiders worked together to help a select few. It was claimed that these addresses got a lot more airdropped tokens than other users, which led to more accusations of insider trading. Sequoia Capital India led a round of $18 million in funding for Mystiko Network in March. This scandal has cast a shadow over the business.

In reaction to the claims, Mystiko Network put out a statement on X that addressed the community’s worries and explained what they were doing to look into the matter. The team stated that an internal investigation began as soon as they heard about the claims. They made sure the suspicious addresses existed and looked at the transactions that had happened at those locations.

Community skepticism persists

Mystiko Network said that these addresses were early contributors to the ecosystem because they had already made several deals on the network. However, this answer hasn’t fully eased the community’s worries, as they still think that giving large amounts of tokens to new addresses could be an example of favoritism.

This is the second problem with an airdrop that Mystiko Network has had in the last few months. In the last episode, there were anti-Sybil worries about the zkSync airdrop. People are paying more attention to the network because of these ongoing problems, which have made people question the reliability of the airdrop processes.

Even with all the problems, Mystiko Network has continued to grow. Since its mainnet start in March 2023, it has helped over 150,000 people make transactions worth over $276 million. The fact that the project was able to keep users interested and involved despite these problems shows how appealing and useful it could be in the blockchain space.

As the investigation into the airdrop claims moves forward, the cryptocurrency community will be paying close attention to how Mystiko Network handles these problems and makes sure that future airdrops are fair and clear. The result of this study could have big effects on the project’s reputation and on how people in the industry think about how tokens are distributed in general.