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Mystiko Network conducted its second round of airdrops between June 30 and July 17 to qualified holders of its vXZK token, the ERC-20 wrapped version of the XZK.
Mystiko Network, a zero-knowledge (ZK) decentralized platform that offers tools to enhance blockchain trilemma challenges, is under scrutiny for alleged insider trading related to its second airdrop distribution.
According to blockchain reporter Collin Wu, the platform raised suspicions on July 5 when the Mystiko Vault Community Incentives distributed 20 million XZK tokens to 1,487 newly created addresses through the Multisender app. These new crypto addresses were credited with larger amounts of XZK tokens compared to other addresses that qualified for the airdrop.
Suspicious Distribution Patterns
Further, on-chain investigation revealed that two of these so-called “special addresses”, “0xBca”, and “0xda8,” received around 59,570 XZK worth approximately $1,787 and 60,325 XZK tokens valued at $2,170, while others received only $172 worth of the airdrop.
As a result, community members are now suspecting Mystiko of engaging in insider trading. Insider trading occurs when individuals with inside knowledge of a company’s activities make trades based on that information, giving them an unfair advantage.
Adding to the controversy, these users also claimed that the so-called “special addresses” received additional “Gas” tokens from major crypto exchanges such as OKX and Bybit a day after the successful completion of the airdrop distribution.
Mystiko Network conducted its second round of airdrops between June 30 and July 17 to qualified holders of its vXZK token, the ERC-20 wrapped version of the XZK.
The protocol said it took a snapshot of users’ addresses to select the participants to award the XZK, which serves as both a governance and utility token of the network.
Response to Allegations
In response to the insider trading allegations, Mystiko Network took to X to rebuff the claims and reiterated its commitment to transparency.
The platform acknowledged the existence of the “special addresses”, noting that they belonged to early contributors who supported the platform before others.
“Our investigation confirmed the existence of the addresses in question and their transaction history. These addresses appear to be aligned with criteria established for early contributors to our ecosystem, with multiple transactions within the network,” the network wrote on X.
The protocol has also pledged to be more transparent with its community going forward. In March, Mystiko received $18 million in financing from Sequoia India and other venture capital firms in the industry.
