About two weeks ago, the cryptocurrency space faced another alleged recall. This time, blockchain gambling and casino platform ZKasino was at the center of the accusations, with several investors claiming that their money had disappeared.
Despite these allegations, ZKasino continued to publish X updates before disappearing from the public eye with investors' money. The latest development shows that the Dutch authorities arrested a suspect in the Netherlands, and more than $12 million was confiscated in the process.
Suspected cryptocurrency fraudster arrested
Financial Information and Investigation Service of the Netherlands (FIOD) open on Wednesday that a 26-year-old man had been arrested earlier this week for allegedly pulling a ZKasino rug.
According to the press release, Dutch authorities began investigating the $33 million cryptocurrency gambling platform scam on April 25. The criminal investigation began with online reports from the cryptocurrency community and information received from FIOD's intelligence departments.
Employees of Binance's financial crimes compliance team assisted 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 Criminal Investigation Department arrested a man suspected of “fraud, embezzlement, and money laundering.” The suspect's detention was extended to fourteen days “for investigation purposes” after he appeared before a judge.
As part of the investigation, the authorities searched the suspect's home and confiscated about 11.4 million euros (about 12.25 million dollars) from various assets. FIOD seized real estate, luxury cars, and several cryptocurrencies.
The Dutch authorities do not rule out further arrests because the cooperation of the fraudsters involved will be required to recover and return the victim's stolen money.
ZKasino, a scam from the beginning?
As reported by Bitcoinist, rumors of a crypto gambling platform scam started in March when decentralized exchange (DEX) ZigZag made serious accusations against the project. According to rival cryptocurrency exchange, ZKasino failed to pay developers and other contractors who helped build the platform.
Furthermore, ZigZag claimed that the fundraising and project evaluation were likely fake. The post added that the previously announced $40 million ecosystem was not real and will likely never be paid for in real currency.
Despite the alarms ringing, confidence in the cryptocurrency project did not completely collapse until April 20. Users started reporting suspicious activity after the website started showing changes.
One X user pointed out that previously the title “How can a bride earn?” A section of the platform stated that bridged Ethereum will be returned to investors when the chain and its native token, ZKAS, are active. However, this part of the text has allegedly been deleted.
Where is our Ethereum located? pic.twitter.com/fV3d5iFbq4
– Noe G (@0xNoe) April 20, 2024
It is worth noting that ZKasino led investors to believe that they would recover their investment within 30 days. The team has promised the ability to withdraw Ethereum 1:1. Instead, users found that their funds were locked in ZKAS with a 15-month vesting period.
Concerns increased after the bridge became It cannot be accessed After the series has been run. The team later claimed that it was “down for maintenance and will be restored in conjunction with this launch.”
The project's X account continued to post updates until April 24, when it was announced that the bridge had come back to life. Despite user complaints about stolen funds, the post added that users can “transfer your $ZKAS from the ZKasino chain to Ethereum and likewise.”
After this final mail Not addressing the situation, users confirmed their suspicions that it was rugged. The FIOD investigation noted that ZKasino’s promises were never meant to be fulfilled because the smart contract setup indicated that “the fund’s return 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
