In brief
- Crypto influencer IcoBeast had their $1 million MegaETH token allocation revoked on Sunday.
- The revocation was because IcoBeast publicly posted about trying to hedge their MEGA allocation, breaking a rule relating to a one-year lockup period.
- The Ethereum layer-2 network’s token is currently trading at $0.48 on the pre-market, down slightly from when the influencer had their tokens taken away.
Soon-to-debut Ethereum layer-2 network MegaETH is revoking token allocations from those intending to sell or hedge their allotments, with crypto influencer and Kalshi employee IcoBeast a prominent victim of the policy.
MegaETH eliminated IcoBeast’s nearly $1 million allocation–based on pre-market predictions– on Sunday after the latter seemed to suggest they would unload their bag.
“Man, I badly need to figure out how to hedge this,” the influencer wrote on X.
MegaETH conducted a public sale for 5% of its token supply two weeks ago, which attracted $1.39 billion from 53,000 bidders. The network then carefully selected to whom it would grant tokens, based on whether the user had been active within the MegaETH community and was likely to remain a long-term holder.
IcoBeast said that he was among the lucky few selected for token allocation.
According to MegaETH CSO, Namik Muduroglu, IcoBeast’s post violated a rule relating to the one-year lock-up period to which the influencer had agreed—causing IcoBeast’s allocation to be revoked.
“Any MegaETH sale participant who locked their tokens for a year is required to (i) acquire the tokens for their own account without any resale or transfer intention, and (ii) refrain from any transfer, resale, or hedging transaction that would violate applicable laws,” Muduroglu wrote on X. “Anybody who goes into twitter and openly discusses plans to OTC and hedge their positions will receive a refund and zero allocation.”
MegaETH did not respond to Decrypt’s request for comment on whether this rule also affected other users.
The response to the move was mixed, as some argued that IcoBeast didn’t violate the rule but rather just pondered the thought. While others believe it was the correct move to only grant allocation to users they know won’t be looking to sell immediately.
“The sale was 28x oversubscribed. It makes no sense to allocate tokens to someone who wants to sell them before they even receive them,” Muduroglu explained. “It is 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 through the lock period that they themselves requested.”
Pre-market trading on Hyperliquid currently values the MEGA token at $0.48, down 7.69% from $0.525 when IcoBeast said their allocation was nearing $1 million, although pre-market trading is often wrong as traders speculate on the value of a token while many factors remain unknown.
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