Sky Mavis CEO Trung Nguyen called all speculation that the Axie Infinity team was involved in insider trading in the immediate aftermath of the Ronin sidechain attack as “baseless and false”.

This story contains insider trading speculation. These accusations are baseless and unfounded. In fact, the Founding Team invested $7.5 million from a known Axie multi-signature wallet into the Ronin Network before the bridge was closed to avoid triggering any short-seller tracking.

– Trung Nguyen (@trungfinity) 28 July 2022

Earlier, a blogger under the pseudonym Asobs posted a video accusing Nguyen and the company’s other founders of insider trading in AXS tokens.

According to Asobs, 22 hours before the Ronin hack was made public, Nguyen’s wallet transferred 48,838 AXS (more than $3.2 million at the exchange rate at the time) to the Binance cryptocurrency exchange.

He noted that other addresses he identified as belonging to Sky Mavis employees also carried out large transactions during this period.

13/19
Here we have a 5 day period where AXS was running but before the attack was discovered. Then about 22 hours between when SM finds out about the hack and shuts down the network. pic.twitter.com/MBEnitasCs

— Asobs (@Asobs_CNG) 28 July 2022

“Here we see a five-day period where AXS is rising and hacking has yet to be discovered. Then there was a time gap of about 22 hours between Sky Mavis becoming aware of the attack and shutting down the network. […] Asobs noted that when we look at the transferred amounts, there is a significant difference between the transferred value in these two periods.

The blogger revealed that he found seven wallets associated with Sky Mavis employees. During that five-day period, they collectively moved $150,000 worth of assets, but after the company became aware of the attack, the same wallets traded $1.15 million.

Speaking to Bloomberg, company spokesperson Cali Moore confirmed that Nguyen actually controlled the address that transmitted 48,838 AXS. He explained that the CEO wanted to bolster the company’s liquidity during the impending crisis and had to run the transaction “in a non-market-friendly manner”.

“We understand that our position will depend on the amount of AXS on Binance. More liquidity will enable us to use various loan/equity collateral options. “The founding team decided to transfer the assets in its wallet to prevent traders following official Axie addresses from getting ahead of the market.”

On Twitter, Nguyen confirmed that the $3 million transfer of AXS to Binance was “part of its liquidity plan.” He said his project team had sent $7.5 million worth of assets to the exchange “from a well-known multisig wallet” before the Ronin Bridge closed.

Recall that on March 29, 2022, Sky Mavis announced that the Ronin sidechain had been hacked. The developers said on March 23 that attackers withdrew $625 million worth of crypto assets using a vulnerability and the network was halted.

As a result of a phishing attack on one of the company’s employees, hackers managed to gain access to its infrastructure and Ethereum sidechain validators.

The developers later noted that the attackers were using social engineering. The attack was carried out in December 2021.

The Ronin reboot took place in June, three months after the attack.

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