MegaETH ICO buyer loses $1m token allocation following hedging comment

An investor who participated in MegaETH’s oversubscribed $50 million token sale has lost his allocation after posting his intention to hedge his position on social media.

Micheal

Nov 11, 2025 - 21:29

MegaETH ICO buyer loses $1m token allocation following hedging comment

On November 8, IcoBeast, a pseudonymous crypto influencer with 67,000 followers, posted on X that his allocation from MegaETH’s token sale was worth “nearly $1 million dollars,” and that he needed “to figure out how to hedge this.”

Hedging refers to offsetting a position in an asset to reduce the risk of potential losses. In the case of hedging crypto tokens, it often refers to placing a bearish bet that pays out if a token falls in value.

To hedge, IcoBeast floated ideas such as getting a trading desk to write him a put, a derivative that pays out when the price of an asset falls.

A day later, IcoBeast posted a follow-up. “My allocation has been revoked and is now worth $0,” he said.

The reason? Hedging tokens violates the rules of MegaETH’s sale, according to Namik Muduroglu, MegaETH Labs’ chief strategy officer.

“Anybody who goes into Twitter and openly discusses plans to OTC and hedge their positions will receive a refund and zero allocation,” he said in a November 10 X post. “It makes no sense to allocate tokens to someone who wants to sell them before they even receive them.”

MegaETH is an upcoming blockchain project built on top of Ethereum. It aims to provide 100,000 transactions per second by using parallel transaction execution, among other technical features.

The project’s $50 million October token sale, in which IcoBeast participated, vastly exceeded expectations, drawing in over $300 million worth of pledged capital.

IcoBeast, MegaETH Labs, and Muduroglu did not immediately respond to requests for comment.

Mixed reactions

The decision to rescind IcoBeast’s token allocation has divided opinion among crypto investors.

Some praised the move as evidence that MegaETH’s founders care about the long-term success of the project and have no reservations about cutting off short-term profit seekers.

“Feeling sorry for IcoBeast here, but this should be a strong signal to the community and all $MEGA holders that you’re in the best possible hands,” Simon Dedic, founder of crypto investment firm Moonrock Capital, said on X.

“Not allowing people to hedge is nuts,” Grug, a pseudonymous crypto influencer, said on X. “Language like this will also just lead to more people hedging, which, let’s be honest, you nor anyone other protocol can effectively track.”

It’s not clear how MegaETH will enforce its no-hedging policy.

Token sale participants could hedge their positions on perpetual futures exchange using a different crypto wallet to the one they used to participate in the token sale, or organise a hedge privately with a third-party, and there would be no way for MegaETH to know that a participant had done so.