Axie Infinity CEO Moved Crypto Tokens Before the Company Revealed Hack

Sky Mavis, the company that makes the online game, says the executive was shoring up funds to protect the business and help users after Ronin attack. From a report: This spring, Sky Mavis, the startup that makes the video game Axie Infinity, announced it had suffered a devastating hack. While most video games are primarily recreational, Axie Infinity's popularity relied largely on its players' ability to trade and earn crypto tokens that had financial value, and players had stashes that represented significant savings. The hack forced the Vietnam-based game developer to shut down its system for pulling tokens out of the game, essentially freezing the assets of its users before they could react to the news. Most of them, anyway. In the hours before the announcement and freeze, a digital wallet belonging to its chief executive officer and co-founder, Trung Nguyen, made a large transaction that included about $3 million worth of Axie Infinity's main token, AXS. The tokens moved from Axie's blockchain -- a digital ledger for recording transactions -- to the crypto exchange Binance. Although the transfer was visible to anyone with an internet connection, there's nothing about the wallet that directly connects it to the person controlling it, as is true of most crypto transactions. But after being presented with analysis of public data that seemed to link the wallet to Nguyen, Sky Mavis confirmed that he controlled it. The unusual activity took place during a moment of acute stress for Sky Mavis. For months, the first version of its game had been showing showing signs of steep decline, and many players were losing faith. The company was rushing to get the new version of Axie Infinity out when hackers on March 23 drained its system of cryptocurrencies that were worth over $600 million at the time. It was one of the biggest cyberattacks in the history of crypto. Anyone who knew what was going on would have had a strong incentive to sell tokens in the system before they were temporarily locked up, and moving them to the Binance exchange would have been a necessary first step toward cashing them out. But Sky Mavis says that this wasn't the reason Nguyen made the transfer. In emails, Kalie Moore, a company spokeswoman, said that Nguyen had been working to shore up the company's finances during the crisis, and had to do so in way that wasn't obvious to the broader crypto market, for the good of the overall Axie Infinity economy. By moving AXS to the exchange, said Moore, the company could provide liquidity to its users as it restored access to funds via Binance.

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