MegaETH reclaims the allocation of 1 million USD tokens after KOL IcoBeast shows off on the internet.

The upcoming Ethereum layer-2 network, MegaETH, has initiated the recall of token allocations from individuals believed to have the intention to sell or hedge risks (hedge), including the crypto KOL and Kalshi employee, IcoBeast, who has become a typical victim of this policy.

Last Sunday, MegaETH canceled the allocation of nearly 1 million USD of IcoBeast—based on market predictions—after this KOL seemed to suggest that they would sell the allocated tokens. On X, IcoBeast boasted about buying 1 million USD worth of tokens, and would hedge it right afterwards:

“I really need to find a way to mitigate the risks for this.”

Two weeks ago, MegaETH held a public sale of 5% of the total token supply, attracting 1.39 billion USD from 53,000 investors. Afterwards, the network carefully selected those who would be allocated tokens based on their level of activity in the MegaETH community and their ability to hold tokens long-term. IcoBeast is one of the few lucky ones chosen.

According to MegaETH's CSO, Namik Muduroglu, IcoBeast's article violated the one-year token lock-up regulation, leading to the allocation being canceled:

MegaETH has not responded regarding whether this regulation applies to other users.

Reactions to this move are quite varied: some believe that IcoBeast did not violate regulations but merely expressed thoughts, while others support the idea of allocating tokens only to those who are certain not to sell immediately.

Muduroglu explained:

“The sale exceeded 28 times the demand. It would be unreasonable to allocate tokens to those who want to sell before receiving them. It is better for MegaETH and other MEGA holders if the tokens are allocated to those who are optimistic about MEGA and are willing to hold through the lock-up period that they voluntarily requested.”

Currently, pre-market trading on Hyperliquid prices the MEGA token at $0.48, down 7.69% from $0.525 when IcoBeast reported their allocation of nearly $1 million. However, pre-market trading often does not accurately reflect true value, as many factors are still unclear.

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