MegaETH withdraws $1 million token sale allocation after influencer posts trading plans

Debuting soon Ethereum layer-2 network MegaETH withdraws token allocations from those who plan to sell or hedge their allocations, with crypto influencer and Kalshi colleague IcoBeast a prominent victim of the policy.

MegaETH cut IcoBeast’s allocation of nearly $1 million – based on pre-market predictions – on Sunday after the latter appeared to suggest they would unload their bag.

“Man, I really need to figure out how to cover this,” the influencer said wrote on X.

MegaETH conducted a public sale for 5% of its token supply two weeks ago attracted $1.39 billion from 53,000 bidders. The network then carefully selected who it would award tokens to, based on whether the user had been active within the MegaETH community and was likely to remain a long-term holder.

IcoBeast said he was among the lucky few selected for token allocation.

According to MegaETH CSO, Namik Muduroglu, IcoBeast’s post violated a rule regarding the one-year lock-up period that the influencer had agreed to, causing IcoBeast’s assignment to be revoked.

“Any MegaETH sale participant who has locked its tokens for one year is obliged to (i) acquire the tokens for its own account without any intention of resale or transfer, and (ii) refrain from any transfer, resale or hedging transaction that would violate applicable law,” Muduroglu said. wrote on X. “Anyone who goes on Twitter and openly discusses plans to use OTC and hedge their positions will get a refund and zero allocation.”

MegaETH did not respond Declutter‘s request for comment on whether this rule affected other users.

Reaction to the move was mixed, as some argued that IcoBeast wasn’t breaking the rule, just pondering the thought. While others believe it was the right move to only award allocations to users they know won’t want to sell immediately.

“The sale was 28x oversubscribed. There is no point in allocating tokens to someone who wants to sell them before even receiving them,” Muduroglu explained. “It will be better for MegaETH and other MEGA holders if we allocate these tokens to people who are bullish on MEGA and are at least willing to hold the lock period they themselves have requested.”

Pre-market trading on Hyperfluid currently values ​​the MEGA token at $0.48, down 7.69% from $0.525 when IcoBeast said their allocation was close to $1 million, although pre-market trading is often wrong as traders speculate on a token’s value while many factors remain unknown.