Axie Infinity CEO withdrew $3 million worth of AXS tokens before the Ronin hack was disclosed

What’s new? Trung Nguyen, CEO of Sky Mavis, the developer of the Axie Infinity game, admitted that he transferred $3 million worth of AXS governance tokens from the Ronin sidechain before official information about the hack was released. According to a Bloomberg investigation, Nguyen sent the assets to the crypto exchange Binance just three hours before the company reported the attack, in which hackers withdrew $625 million in cryptocurrency. The hack forced the developers to suspend the token withdrawal system from the game, effectively freezing user funds. The company assured that the transfer of funds by the head of the company was made in order to secure the project.

Bloomberg’s material

What else is known about this situation? Sky Mavis spokeswoman Kalie Moore confirmed the information after the outlet shared its analysis of the blockchain with the platform. “Our position and options would be better the more AXS we had on Binance,” she stated.

Moore added that the funds were transferred from Nguyen’s personal wallet so that AXS short sellers “would not be able to front-run the news,” and noted that allegations of other motives regarding the nature of the transfer would be “baseless.”

After Bloomberg’s publication, the head of Sky Mavis posted a series of Twitter posts confirming Moore’s words:

“My life’s work is Axie Infinity and the community we’ve created together. I take ownership of the security breach, and will use it as a learning experience.”

My life’s work is Axie Infinity and the community we’ve created together. I take ownership of the security breach, and will use it as a learning experience.— Trung Nguyen (@trungfinity) July 28, 2022

The Ronin network was hacked on March 23, but it could not be detected for several days. The company did not eventually report the attack until March 29. Attackers stole 173 600 wrapped Ethereum (wETH) and 25,5 million USDC stablecoins. On June 28, the developers restarted Ronin.

During the hacking investigation, the US Treasury Department and the FBI linked the attack on the sidechain to the hacker group Lazarus. The authorities added to the sanctions list the wallet that held some of the stolen funds.

Later, it turned out that the hack was carried out with a fake offer to work with a malicious file, sent to one of the Sky Mavis employees. Details of the incident can be found in GetBlock Magazine’s article.