MegaETH’s $296M presale under scrutiny as Sybil activity surfaces – Details

Key Takeaways

What were the presale rules?

Each user was allowed one wallet, a max bid of $186,000, and required KYC verification through Echo.

How did some participants allegedly bypass these limits?

Some users may have used different KYC documents (e.g., from friends or family) to register multiple verified wallets.

The MegaETH presale, which went live on the 28th of October and sold out within minutes, is now facing scrutiny after on-chain analysts – Bubblemaps flagged signs of coordinated Sybil activity.

Data indicated that more than 20 separate entities allegedly used multiple wallets to bypass the presale’s maximum allocation limits. 

As expected, this has raised concerns about fairness and concentrated token ownership even before the project’s public debut.

Source: Bubblemaps/X

Loopholes in MegaETH presale

On-chain investigators found that several participants bypassed the allocation limits despite the presale’s guardrails.

The rules allowed only one wallet per user and capped bids at $186,000, with Echo handling identity verification.

However, data showed that some buyers used multiple KYC credentials to secure more than their permitted allocation.

For example, the wallet 0x9f5c received funds from Kraken just a day before the presale.

It then distributed those funds to three newly created wallets and coordinated a combined pledge of around $600,000 across four wallets—nearly three times the allowed limit.

What caused this mishap?

Researchers identified roughly 20 similar clusters. The issue appeared to stem from how KYC verification was applied.

Although Echo required identity documents, some users reportedly submitted bids under multiple legal identities by using documents from associates or relatives. This allowed several “verified” wallets to pass compliance checks while being controlled by the same user.

The Intel Desk is reviewing the investigation. Token holders can vote to escalate the case for deeper scrutiny.

Meanwhile, both MegaETH Labs and Echo have been notified and may collaborate to map wallet linkages in greater detail.

Demand for MEGA tokens and more

This event happened alongside overwhelming demand for the MEGA token auction, which opened on the 27th of October as a 72-hour sale on Ethereum [ETH].

Although the auction technically remains open, the raise has already reached its maximum cap, with roughly $296 million in commitments at the top price, creating demand of about 5.9 times the available supply.

Each bidder is allowed to lock their allocation for one year in exchange for a 10% discount. This locking mechanism is a requirement for U.S. participants.

For participants from other regions, it serves as an optional incentive. The sale is not conducted on a first-come-first-served basis. Final allocations will be determined after the bidding window closes on the 30th of October.

What’s more?

MegaETH will consider both “social and onchain criteria” when selecting participants, which may benefit users who are more engaged in the Ethereum ecosystem.

The allocation and settlement process is expected to be finalized between the 5th and the 21st of November. During this period, participants will have the option to withdraw their bids if they decide to exit.

Overall, MegaETH’s token distribution signals a long-term ecosystem focus, with only 9.5% allocated to the team and the majority directed toward network growth and rewards.

Meanwhile, broader market sentiment remains influenced by PolitiFi momentum, where tokens like Official Trump [TRUMP] and Melania [MELANIA]  continue to attract speculative interest despite memecoins lagging the wider crypto sector.

Thus, with MEGA holders still relatively limited at around 1.12K, both the token’s supply structure and ongoing politically driven trading trends will be key factors to watch moving forward.