Update: We continued to investigate the situation and found evidence of misconduct. A team member confirmed their role in leaking confidential information. They were immediately let go.

We have updated this post to clarify the results of our investigation.

We appreciate the community’s pivotal role in this investigation. We realize the importance of trust in the future we are building with our community, and we will continue to strive to be worthy of that trust.

If you ever notice suspicious activity, please contact the team directly via email or the community Discord.

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Original post with minor edits to reflect the update: Since day one, we’ve had a policy that members of the CryptoKitties Team with knowledge of our genetic algorithm or breeding formula cannot buy or breed cats.

In a recent Answers Session with TNW, a community member asked why this was — after all, it gives those developers a blind spot.

You can read our full answer on this post or via TNW, but here’s the short version:

The policy ensures no one with “insider knowledge” can influence, abuse, or otherwise profit unfairly as a result of privileged information.

It does create a blind spot, but this issue is mitigated by the rest of the CryptoKitties team, and the rest of the larger Axiom Zen organization, who are allowed to play the game (although we strictly keep any info about the genetics and the “Fancy recipes” secret from them).

It’s a policy we’ve been discussing internally precisely due to the previous point.

Community concerns

One of this week’s top Reddit posts on r/CryptoKitties made reference to a user who was the first to breed a suspiciously large number of Fancy Cats — specifically Earnie, Momo, and Negato. The author wasn’t making any accusations, but it seemed like a pretty big coincidence and they were (rightly) concerned about the sanctity of the in-game economy and the principle of fair play.

“While, that may be a coincidence I am just voicing my concern, [leaking] insider fancy information would be a great detriment to this game.”

We share these concerns, and these coincidences prompted us to investigate the issue thoroughly.

The user in question is not a member of our team, and a close review of their actions did not conclusively indicate that their breeding activity was influenced by privileged information.

UPDATE: While the initial investigation did not find any conclusive indication of wrongdoing, our more recent investigation did result in conclusive evidence of access to privileged information.

Here’s what we found suspicious

There have previously been accusations of potential foul play, but no evidence (e.g. a transaction that proved insider knowledge) was ever uncovered.

However, this particular post pointed to specific knowledge (a trait being used before it was publicly teased as part of a Fancy recipe), and led us to uncover some very troubling additional information: the lucky user (whom we will call “Lucky” from here on out) had a LinkedIn connection to one of the few team members who have access to the Fancy recipes before they’re released.

Our investigation

Lucky is an active breeder, with over 2,200 transactions tied to their Ethereum address and with more than 95% of those directly related to CryptoKitties. They currently have over 500 diverse Kitties and around 1,000 breeding transactions. These circumstances make their ability to breed Fancies less surprising, but also represent a huge pile of material to sort through for evidence of insider info.

Analyzing Negato

Our first analysis examined the events leading up to Lucky’s breeding of the very first Negato. Their efforts in the blockchain history were obvious: after a multi-day gap in CK smart contract activity, they started on a flurry of breeding immediately after our first Twitter hint (when we made reference to Onyx).

The breeding hit a fever pitch after we teased a reference to Henna, and you can see dozens of breeding attempts combining Onyx and Henna, plus several purchases (mostly Onyx, but some Onyx+Henna).

Despite a massive flurry of breeding, Lucky didn’t successfully breed Negato until after we had hinted the third of the four required traits (Wolfgrey). The one trait we didn’t hint at was a recently released gene, so it’s not a stretch to imagine that Lucky guessed that we’d include it for Negato.

Analyzing YuriCatsuki

Our other major analysis was checking for insider knowledge about the ingredients required for YuriCatsuki, our most recent Fancy Kitty.

The user who raised the issue on Reddit had noted that Lucky had a particular interest in the Tiger pattern hours before we hinted on Twitter that Yuri included a striped pattern. Indeed, we found that Lucky was very active in the 24 hours preceding the Tiger hint, initiating 152 breeding events in less than a day!

As the Reddit poster noticed, many of these breeds included the yet-to-be-revealed Tiger pattern. However, as we looked closer, these breeding attempts seemed unrelated to YuriCatsuki and almost always included at least two (and usually three) of the traits required to make MisterPurrfect. At the same time, we could not find a single example of Lucky breeding Elk and Tiger together, and yet Elk was well known to be part of the Yuri formula at this time (from our first Twitter hint).

In fact, Lucky didn’t seem to be trying to breed YuriCatsuki at all before the second hint was released, and when YuriCatsuki was discovered, it was found by another user entirely.

Our conclusion

We found nothing that leads us to believe that Lucky has any insider information. So far as we can tell, they’re simply a competent, thorough, and driven breeder.

If Lucky did have access to our Fancy formulas, they could have bred these Fancies in a tiny fraction of the time. It’s not impossible to spend thousands of dollars on failed breeding attempts to throw off suspicion, but so far as we can tell, Lucky couldn’t have been aware that there were suspicions back when Negato was discovered. A laborious (and expensive!) cover-up seems exceedingly unlikely, and unreflective of what we saw during our investigation.

We take this stuff seriously

Yes, CryptoKitties is a game. But part of what makes great games great is how important they become to their biggest fans.

We’ve always maintained that we need to be as serious about our game as our biggest fans. These are users who are giving CryptoKitties their love and dedication; it’s only fair that we return it in kind. This is why we put a policy in place prior to the game launching about who on our team could participate. This is why we try to be transparent about our roadmap (without giving away any fun surprises!). And this is why we try to be very open about how we make money.

The CryptoKitties Co-Founder and Lead Architect (who also authored the original ERC-721 spec) conducted this investigation himself. It was a huge sacrifice on his part — nobody on the team is swimming in free time — but with potential concerns about fairness, we couldn’t leave any room for lingering doubt.

As for the LinkedIn connection? It appears to be nothing. So far as we can tell, Lucky has never met anyone on the CK team, including the developer they’re connected to on LinkedIn. Our team gets loads of connection requests on LinkedIn these days, and some of those are bound to be from our players.

A quick note for the community

Holy cat poop, some of you folks are crazy! The fact that someone noticed a suspicious needle in the distributed-ledger equivalent of hay is buckwild. It’s also greatly appreciated. Please bring these kinds of issues to our attention whenever possible.

We’ve been discussing how we should formalize our policy on core team members participating in the game before this issue came up, and this investigation has galvanized us to move faster on that. This issue underlines why it’s necessary, so look forward to more information about this soon.

We’re going to continue being transparent and communicating with our community wherever possible. Thank you to the community for bringing this to our attention.