The zkSync-based Gemholic project was suspected of orchestrating a rug pull following a series of malicious moves on Saturday. The company behind defunct decentralized exchange GemSwap moved previously inaccessible investor funds, sparking suspicion from the crypto community at large.
Gemholic disappears from social media after moving investor funds
As of April 2023, Gemholic owned 921 Ether (ETH), worth $1.7 million at that time, accidentally locked into one of its zkSync smart contracts, the GemstoneIDO, due to an error in the transfer() function. After receiving a request for help from Gemholic, the zkSync development team announcement that the funds were intact and that they had developed a solution to unlock said contract.
June 7, 2024, zkSync implemented its recent v24 network upgrade on its mainnet which fixed this contractual error, allowing Gemholic to access previously blocked funds. However, following this development, the Gemholic team removed 921 ETH, now valued at $3.5 million, from the project’s contract to an unrelated Ethereum wallet.
Additionally, the zkSync-based project has now erased its digital footprint, deactivating all Telegram channels and X accounts. As expected, these actions have led many crypto enthusiasts to accuse Gemohlic of running a pull the rug after making false promises to investors over the past year.
Gemholic had clearly stated that the project would resume after recovery of blocked funds. Particularly on April 21, 2024, they job on X saying:
We understand that many people have lost their faith, but we still believe that @zksync the team can make things right. We need everyone to trust us. As soon as the contract is fixed, we will launch a marketing campaign and a pre-launch of the project. We will also refund the overflow…
However, with what appears to be a heist, Gemholic could add to a long list of rugs in the crypto space, which is already a major concern for the nascent industry.
Web3 Dev slams KYC provider for silence
For more news, a Web3 developer with X handle @Nserec has called blockchain security firm SolidProof for its failure to respond to the alleged rug pull by Gemholic after conducting the Know Your Customer verification process for the now-defunct zkSync-based project.
NSerec posits that this prolonged silence may be an attempt to prevent fear, uncertainty, and doubt (FUD) among customers. However, the developer requires that SolidProof issue a statement admitting its incompetence or report the matter to the relevant legal authorities with an accompanying announcement.
Meanwhile, NSerec also urged customers affected by Gemholic’s alleged rug pull to contact Binance, as the project’s creator contact was initially funded by the leading exchange.
Featured image from CoinsCapture, chart from Tradingview
