Allegations of insider trading have marred Mystiko Network’s second airdrop after a few select wallets amassed more airdropped tokens than regular users.

The accusations started with an X post from blockchain reporter Colin Wu, who highlighted suspicious activities involving newly created addresses and large token distributions.

Notably, Mystiko Network’s second airdrop is meant to reward holders of the vXZK, the ERC-20 wrapped version of the XZK, which functions as the governance token. The team disclosed that the second airdrop was distributed, according to a snapshot of vXZK balances, from June 30 to July 17.

Interestingly, citing on-chain data, Wu revealed that on July 5, the official Mystiko-Vault Community Incentives wallet moved 20 million XZK tokens to 1,487 newly created addresses using Multisender, a crypto app that allows market participants to send tokens to multiple addresses.

The new addresses then received gas funds from major exchanges like OKX or Bybit just a day after receiving the airdrop. The community has attributed such coordinated actions to an orchestration aimed at favoring insiders, who then benefited from these substantial token allocations.

Moreover, the number of airdropped tokens received by these new addresses was notably higher than that of regular users, prompting accusations of insider trading. The event has intensified scrutiny on Mystiko Network, especially since the project secured $18 million in a funding round led by Sequoia Capital India in March.

Mystiko Network responds

In response to these allegations, the Mystiko Network team issued a statement on X, addressing the community’s concerns and outlining their steps to investigate the matter.

Mystiko stated that they immediately launched an internal investigation upon learning about the allegations. The investigation confirmed the existence of the addresses in question and reviewed their transaction history.

The team stressed that these addresses met the criteria for early contributors to the ecosystem, having conducted multiple transactions within the network. This marks the second airdrop controversy in two months following the lack of anti-Sybil concerns around the zkSync airdrop.

Meanwhile, the Mystiko Network has continued to attract over 150,000 users and over $276 million in transaction volume. since the mainnet launch in March 2023.