ZKasino Scam Wallet Liquidated for $27.1M After ETH Price Drop
1min read A wallet linked to the $40 million ZKasino scam has incurred a significant loss of $27.1 million in Ether after a leveraged position was liquidated. This event has been interpreted by some in the crypto community as a form of karmic justice. ZKasino, which launched in April 2024, attracted investors by promising an airdrop of its native token to users who bridged Ether to the platform. However, instead of returning the funds, ZKasino transferred approximately $33 million in user ETH to the staking protocol Lido Finance.
Nearly a year later, the wallet behind the alleged exploit has been liquidated for $27.1 million after ETH’s price declined sharply. This liquidation comes after a period of record-breaking sell-offs in traditional equity markets, which led to a crypto market correction, causing ETH’s price to fall to a near two-year low of $1,480, last seen in May 2023. The liquidation of the ZKasino wallet underscores the risks associated with leveraged positions in the volatile crypto market.
Ask Aime: Why did ZKasino's wallet lose $27.1 million in Ether after being liquidated?
Despite the liquidation, affected users appear no closer to recovering their funds. After being accused of running an exit scam, ZKasino claimed to initiate a 72-hour process to return funds to investors a month after transferring the $30 million of user funds to Lido. However, any investors wanting their ETH back would forfeit any allocated ZKAS tokens and the remaining 14 months of ZKAS releases. On April 29, 2024, Dutch authorities arrested one of the people suspected to be responsible for the “rug pull.” A few days later, all bridged ETH was returned to the ZKasino multisig wallet as Derivative Monke publicly denied the rug pull allegations. However, ZKasino still hasn’t returned the ETH nearly a year after the incident.
This incident serves as a stark reminder of the risks involved in the crypto market, particularly when dealing with leveraged positions and unregulated platforms. The liquidation of the ZKasino wallet highlights the potential consequences of engaging in fraudulent activities within the crypto space. Despite the efforts of authorities to apprehend those responsible, the recovery of funds for affected investors remains uncertain. The crypto community continues to grapple with the aftermath of this scam, emphasizing the need for greater regulation and oversight in the industry.
