Axie Infinity Admits CEO Trung Nguyen Dumped on Players

Axie Infinity developer Sky Mavis acknowledged Thursday that CEO Trung Nguyen transfered $3 million worth of the game’s token, AXS, to Binance before informing users that Sky Mavis’ Ronin Bridge had been hacked.

“At the time, we (Sky Mavis) understood that our position and options would be better the more AXS we had on Binance,” the company’s Kalie Moore said in a statement to Bloomberg. “This would give us the flexibility to pursue different options for securing the loans/capital required. “The founding team chose to transfer it from this wallet to ensure that short-sellers, who track official Axie wallets, would not be able to front-run the news.” She said that any suggestion of other motives would be “baseless.”

Hackers associated with North Korea’s state-backed Lazarus Group siphoned 173,600 Ethereum and 25.5 million USDC from Sky Mavis’ Ronin Bridge in a March 23 attack — a roughly $600 million value at the time. Numerous observers realized the attack took place within hours of its occurrence by tracking on-chain data, but Sky Mavis claimed it failed to notice until March 28, 22 hours before it announced the incident. Prior to the announcement, a wallet linked to Nguyen moved $3 million in AXS to Binance. However, the company refused to comment on the move until Bloomberg’s Thursday report.

Sky Mavis declined to say whether Nguyen sold the tokens before the announcement of the hack, a highlight that Bloomberg did not press the company’s spokesperson to elaborate upon. It is not clear how moving the AXS to Binance would allow the company to “front-run” short-sellers — unless Nguyen did indeed sell the tokens — nor would the move assist the company in obtaining a loan, unless it sought to collateralize a line of credit from Binance. It also left the possibility open that he may have shortened the company’s token prior to the announcement.

A number of wallets linked to Sky Mavis employees also offloaded tokens before the announcement of the hack. The company’s spokesperson refused to confirm allegations related to that matter but said that if they did sell their AXS, it was because the token’s price surged prior to the announcement.

“Sky Mavis routinely tracks on-chain transactions for employees and after reviewing, believes anyone who sold after the incident, but before the bridge was closed, sold due to [AXS] increasing 49 percent in price over a short period of time prior to the breach being discovered,” the spokesperson said.