A wallet associated with the infamous ZKasino scam has suffered a staggering loss of over $27 million due to the liquidation of a leveraged position. This event has stirred discussions in the crypto community, with many viewing it as a form of karmic retribution.
Launched in April 2024, ZKasino aimed to attract investors by promising an airdrop of its native token in exchange for bridging Ether (ETH) to their platform. Unfortunately, instead of returning these funds, ZKasino transferred approximately $33 million in ETH to the Lido Finance staking protocol. Almost a year later, the alleged scammer’s wallet incurred losses of $27.1 million as ETH’s price sharply declined, diving to a near two-year low of $1,480, last seen in May 2023.
A blockchain analytics firm provided insights into this liquidation, stating, “A scammer gets a dose of karma,” while detailing the significant losses incurred by ZKasino’s operations. The situation is made worse for affected users, who still find themselves in a difficult position without recovery of their funds.
The effects of this liquidation come amid a broader trend in the financial markets, including record-breaking sell-offs in traditional equities that have caused a ripple effect in the crypto landscape. Recent events, such as a crypto whale’s last-minute $14 million deposit to prevent a liquidation exceeding $340 million, highlight the volatility currently gripping the market.
After allegations of running an exit scam, ZKasino announced a plan to return funds to its investors, initiating a 72-hour process that started a month after they apparently misappropriated $30 million. They indicated they would enact a two-step bridge back process, allowing users to return ETH at a 1:1 ratio. However, this promise came with a heavy caveat: those opting to withdraw their ETH would have to forfeit their allocated ZKAS tokens as well as subsequent token releases.
In a responsive move, Dutch authorities recently apprehended an individual believed to be involved in the rug pull. Shortly after this arrest, ZKasino claimed all bridged ETH was returned to their multisig wallet, while a figure known as Derivative Monke publicly denied any wrongdoing.
Despite these developments, nearly a year has passed since the incident, and ZKasino has yet to fulfill its promise to return ETH to defrauded investors, leaving them frustrated and in the dark. One anonymous user reported, “Everyone who sent the ZKAS back has not heard anything from them yet,” indicating a concerning lack of communication from ZKasino’s team. The crypto community awaits further developments on both the wallet liquidation and the fate of ZKasino’s investors.
With the scandal’s repercussions resonating throughout the cryptocurrency space, it serves as a stark reminder of the risks associated with digital investment platforms. As investors navigate this tumultuous landscape, staying informed and cautious is more important than ever.
