AltLayer Team Member Denies Insider Trading Allegations

On-chain sleuths have accused AltLayer’s head of growth of using inside information to turn a profit of $200,000 from the airdrop.

By: Pedro Solimano Loading...

AltLayer Team Member Denies Insider Trading Allegations

Blockchain analysts have accused AltLayer’s head of growth, Dorothy DeFi, of gaming the project’s airdrop to turn a profit of at least $200K.

Dorothy denied engaging in insider trading when contacted by The Defiant, saying that the wallet in question belonged to a friend.

The allegations come a day after AltLayer, a project offering services to allow developers to quickly spin up rollup networks, airdropped 300M ALT tokens worth $90M to over 40,000 eligible DeFi participants.

Pseudonymous sleuth Purif was the first to sound the alarm. Pointing to several suspicious NFT sales – two OG Badges and several Oh Otties, both part of collections eligible to claim the lion’s share of the airdropped ALT tokens.

The first of the OG Badges was sold for 7.77ETH ($17,500) just minutes before AltLayer’s public snapshot announcement. The second badge and two of the Oh Otties were offloaded soon after the announcement.

NFT sales screenshot
NFT sales

The claimed ALT tokens, worth $206,000, were sent to Binance, likely to be sold.

In the midst of the controversy lies Mulan0x, a friend of Dorothy, and allegedly the owner of the wallet that traded the OG Badges and Oh Otties.

A second crypto sleuth, Blur Crypto, also analyzed the situation in-depth, noting the suspicious behavior. Dorothy told The Defiant that she gifted an OG Badge to Mulan0x one year ago, and acquired a second one on Dec. 24.

The concern comes since the NFTs were sold within minutes of the public snapshot announcement.

Dorothy told The Defiant the sales– calling the timing coincidental – happened in order to purchase a Pudgy Penguin NFT. Onchain data shows that the wallet did purchase a Pudgy Penguin on Jan. 17, going on to sell it the next day for a tidy 5 ETH profit.

Pudgy Penguin Trades
Pudgy Penguin Trades

Blur Crypto spoke to Dorothy and Mulan, both of whom rejected claims of insider trading, which led the investigator to conclude, “It's up to you to decide what to believe. Nothing more from me on this.”

Dorothy has since posted her version of events. The team at AltLayer has not made any official comments regarding the allegations.

Insider trading is a common occurrence in the cryptocurrency market. Arkham Intelligence, an on-chain intelligence company, has highlighted in the past how insiders profit from holding large portions of a token’s supply before it goes live – via airdrops or public listing.

UPDATE @ 1/31 - The original accuser has retracted their accusations of insider trading after obtaining further clarity from Dorothy.