About two weeks ago, the crypto space faced another so-called rug pull. This time, blockchain gaming and casino platform ZKasino was at the center of the accusations, with many investors claiming their money had disappeared.
Despite the allegations, ZKasino continued to post X-rated updates before disappearing from public view with investors’ money. The most recent development shows that a suspect has been arrested in the Netherlands by Dutch authorities and more than $12 million has been seized in the process.
Alleged crypto scammer arrested
The Netherlands Tax Information and Investigation Service (FIOD) revealed On Wednesday, a 26-year-old man was arrested earlier this week for pulling the rug at ZKasino.
According to the press release, Dutch authorities began investigating the $33 million crypto gaming platform scam on April 25. The criminal investigation began with online reports from the crypto community and information from the FIOD intelligence services.
Staff of Binance The Financial Crime Compliance team assisted the FIOD during the investigation, helping to “secure millions of euros in cryptocurrencies”. Likewise, the public prosecutor’s office assisted the investigation team in contacting members of the ZKasino team.
On April 29, the FIOD arrested a man suspected of “fraud, embezzlement and money laundering”. The suspect’s detention was extended to fourteen days for “investigative purposes” after he was presented to a magistrate.
As part of the investigation, authorities searched the suspect’s home and confiscated approximately 11.4 million euros, worth approximately $12.25 million, in various assets. FIOD grasped real estate, luxury cars and various cryptocurrencies.
Dutch authorities do not rule out further arrests, as the cooperation of the fraudsters involved will be needed to recover and return the stolen money to the victim.
ZKasino, a scam from the start?
As reported by Bitcoinist, scam rumors on the crypto gaming platform began in March when decentralized exchange (DEX) ZigZag made serious accusations against the project. According to the rival crypto exchange, ZKasino had not paid developers and other contractors who helped build the platform.
Additionally, ZigZag claimed that the fundraising and valuation of the project were likely false. The post adds that the previously announced $40 million ecosystem is not real and will likely never be paid in real currency.
Despite the alarms, confidence in the crypto project did not completely collapse until April 20. Users started reporting suspicious activity after the website started showing changes.
An X user pointed out that previously the question “How does Brid-To-Earn?” » The platform section stated that the bridged Ethereum would be returned to investors when the chain and its native token, ZKAS, came online. However, this part of the text would have been deleted.
Where is our ETH? pic.twitter.com/fV3d5iFbq4
– Noah G (@0xNoe) April 20, 2024
It is worth noting that ZKasino led investors to believe that they would get their investments back within 30 days. The team had promised the ability to withdraw its 1:1 bridged Ethereum. Instead, users discovered that their funds were locked in ZKAS with a 15-month vesting period.
Concerns grew after the bridge became inaccessible after the channel goes live. The team later claimed that it was “under maintenance and will be reworked in conjunction with this launch.”
The project’s X account continued to post updates until April 24, when it announced that the bridge was back up and running. Despite user complaints about stolen funds, the post adds that users can “transfer your $ZKAS from the ZKasino chain to Ethereum and the same.”
After this final job and in the absence of a solution to the situation, users confirmed that they suspected that they had been robust. The FIOD investigation highlighted that ZKasino’s promises were never meant to be fulfilled, as the smart contract setup suggests that the “return of the fund was not intended.”
Total crypto market cap is at $2.22 trillion in the bi-weekly chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, chart from TradingView.com
