Apriori Airdrop Under Investigation Amid Claims of Token Misappropriation

Apriori, a trading infrastructure startup backed by Changpeng Zhao, is under investigation due to blockchain data indicating that a significant portion of its token airdrop was claimed by a large number of newly created wallets, which raises concerns about possible manipulation.

Key Takeaways

Apriori's airdrop saw about 80% of tokens claimed by over 5,800 newly created wallets on the BNB Chain.
Investigators suspect a Sybil attack, where individuals use multiple wallets to exploit the airdrop system.
The wallets were funded shortly before the token's public claim announcement, suggesting potential insider information.
The project has faced backlash from the Monad community and drawn comparisons to other recent Sybil attack incidents in the cryptocurrency space.

Apriori Airdrop Under Investigation Amid Claims of Token Misappropriation

Apriori Airdrop Details

Apriori, a trading infrastructure company supported by Zhao’s investment firm, is currently facing scrutiny after blockchain analysis revealed that a substantial number of newly formed wallets secretly claimed the majority of its APR token airdrop.

On October 23, Apriori launched its APR tokens on both Ethereum and the BNB Chain as a part of a “Genesis Airdrop.” This initiative aimed to reward initial contributors, testnet users, and NFT holders from partner communities such as MadLads and Moonbirds.

However, an investigation highlighted that nearly 80% of the airdrops on the BNB Chain were claimed by more than 5,800 wallets that were linked to a consolidated group. This trend suggests an orchestrated Sybil attack, a strategy in which airdrop seekers manipulate the system by creating multiple wallets to collect rewards repeatedly.

Potential Inside Information Raises Concerns

According to on-chain data, the cluster of wallets was set up and funded just days before Apriori made its token publicly claimable on the BNB Chain, leading to suspicions of possible insider trading.

Between October 19 and 20, these wallets received small amounts of BNB from only 13 undisclosed addresses sufficient for executing the airdrop claims. Analysts noted that this funding activity occurred before the eligibility criteria were made public on October 22, implying that those behind the wallets likely possessed prior knowledge of the airdrop details.

A deeper analysis of the top 200 APR token holders showed that almost all of them were created between October 5 and 6, lacked significant trading history, and exhibited little on-chain activity aside from receiving the tokens. Only three of the top holders appeared to be genuine users with previous transaction histories and NFT engagement, while the remaining wallets displayed nearly identical trading behaviors, suggesting automated operation or coordination.

Despite several inquiries, Apriori and its founder, Ray Song, did not respond to requests for comments. Notable investors in Apriori include YZi Labs (previously Binance Labs), HashKey Capital, Pantera Capital, and Primitive Ventures.

Developed by ex-engineers from Jump Trading, Coinbase, and Citadel Securities, Apriori has raised $30 million to create an “execution layer” for on-chain cryptocurrency markets, leveraging high-frequency trading strategies to enhance market efficiency and mitigate maximal extractable value impacts.

Image related to Apriori's market performance

As per CoinGecko data, the APR token debuted with a market capitalization of $93 million but has since plummeted over 60% from its launch day high of $0.7396, now trading at less than half of its initial value.

Growing Concerns Over Sybil Attack Incidents

The recent events have ignited debates about the integrity of the airdrop and suggest possible internal manipulation or insider knowledge exploitation.

Critics from the Monad community, where Apriori's token was initially meant to launch, expressed their frustration, claiming Apriori has betrayed its supporters and jeopardized trust before Monad’s upcoming mainnet launch.

This incident highlights an increasing trend of Sybil-style airdrop scandals within the cryptocurrency market. For instance, in September, decentralized exchange MYX Finance faced similar allegations, as 100 wallets reportedly linked to its team claimed $170 million worth of MYX tokens.

Additionally, last year, zkSync and Solana-based Io.net experienced widespread Sybil exploits, where attackers utilized automated wallets and counterfeit GPU reports to claim millions in rewards. LayerZero Labs also took precautionary action by blacklisting hundreds of thousands of suspected Sybil addresses to safeguard its token distribution.

Such tactics present challenges in detection and prevention. Analysts caution that Sybil attacks have become a persistent problem in the industry, undermining confidence in token distribution events.