Accusations of illicit trading have tainted the second distribution of tokens by Mystiko Network after a few privileged wallets received a larger share than regular users.
The allegations arose following a post by blockchain journalist Colin Wu, who pointed out suspicious activities involving the creation of new addresses and the distribution of large amounts of tokens.
The second airdrop by Mystiko Network was intended to reward holders of the vXZK, the ERC-20 version of the XZK governance token. The team disclosed that the distribution took place between June 30 and July 17, based on a snapshot of vXZK balances.
Intriguingly, Wu discovered through on-chain data that on July 5, the official Mystiko-Vault Community Incentives wallet transferred 20 million XZK tokens to 1,487 newly created addresses using Multisender. These addresses then received gas funds from major exchanges like OKX or Bybit shortly after receiving the airdrop. The community believes that this coordinated effort favored insiders who benefitted from these significant token allocations.
Furthermore, the amount of tokens received by these new addresses far exceeded what regular users received, leading to accusations of insider trading. This incident has placed Mystiko Network under increased scrutiny, especially after securing $18 million in funding led by Sequoia Capital India in March.
Response from Mystiko Network
In response to the allegations, Mystiko Network released a statement on X, addressing the community’s concerns and outlining their plan to investigate the issue. The team immediately initiated an internal investigation upon learning of the accusations and confirmed the existence of the addresses in question, reviewing their transaction history.
Mystiko emphasized that these addresses were early contributors to the ecosystem, engaging in multiple transactions within the network. This marks the second controversy surrounding airdrops in two months, following the zkSync distribution that lacked anti-Sybil measures.
Despite the challenges, Mystiko Network has continued to attract over 150,000 users and facilitate transactions worth over $276 million since its mainnet launch in March 2023.
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