MegaETH refunds all $500M after ‘sloppy’ pre-deposit campaign

Key Takeaways

Why is MegaETH refunding all pre-deposit campaign funds?

MegaETH announced on 27 November that it will return all $500 million raised in its chaotic 25 November pre-deposit bridge campaign, admitting that “execution was sloppy.”

What happens next for depositors and the USDm bridge?

All depositors will receive full refunds through a new smart contract currently under audit, with the team promising that contributions “will not be forgotten.”

MegaETH has pulled the emergency brake on its disastrous pre-deposit campaign, announcing on 27 November that it will refund all $500 million raised just two days earlier in what the team now admits was a “sloppy” execution plagued by operational failures.

Source: X

The decision represents a complete reset for the project, which saw its 25 November bridge launch descend into hours of crashes, cap changes, and accusations of mismanagement—culminating in approximately $500 million locked across multiple waves of deposits marked by technical errors and communication breakdowns.

“Execution was sloppy” – Team admits failures

In a candid Twitter thread, MegaETH acknowledged the fundamental problems with the campaign:

“Execution was sloppy and expectations weren’t aligned with our goal of preloading collateral to guarantee 1:1 USDm conversion at mainnet.”

The admission comes after the 25 November launch featured:

• Site crashes that left the bridge down for an hour
• A $250M cap that filled in 156 seconds, locking out most retail participants
• A catastrophic multisig error where the team accidentally set 4/4 signature requirements instead of 3/4
• User @chud_eth executing the transaction 34 minutes early after spotting the blunder
• Multiple emergency cap adjustments [$1B → $400M → $500M] as the team scrambled to regain control

Community sentiment split approximately 60/40 bearish at the time, with critics calling it a “clown show” while defenders pointed to the “insane demand” that locked half a billion dollars in a bear market.

Compliance concerns drive decision

The refund announcement includes a telling detail that suggests regulatory or legal pressure influenced the decision:

“All comms, however, need to follow compliance standards. [i.e. ‘we must adhere to best practices in our disclosures at this juncture’].”

The parenthetical disclaimer—written in stilted legal language—strongly suggests MegaETH received advice that the chaotic launch exposed the project to regulatory risk, particularly around:

• Inadequate disclosure of terms and risks
• Last-minute changes to caps without proper communication
• Potential securities law implications of the pre-deposit structure

By resetting and promising improved “compliance standards” and “best practices in disclosures,” MegaETH appears to be attempting to avoid potential enforcement action or investor lawsuits.

The path forward

The team still has the mainnet targeted for December, but the pre-deposit chaos raises questions about whether they’re ready.

For now, depositors await the audited refund contract and hope their funds return “shortly.” 

Whether they’ll trust MegaETH enough to deposit again when the bridge reopens remains to be seen.