Suspect Of ZKasino Rug Pull Arrested

About two weeks ago, the crypto industry faced another fraud allegation. This time, gambling platform and blockchain casino ZKasino was at the center of the accusations, with many investors claiming to have lost their funds.

Despite the allegations, ZKasino continued to post updates on X until he disappeared from public view along with investors’ money. The latest developments indicate that a suspect has been arrested in the Netherlands by Dutch authorities, with over $12 million seized in the process.

Suspected virtual currency fraudster arrested

Dutch Fiscal Intelligence and Investigation Office (FIOD) revealed On Wednesday, it was announced that a 26-year-old man had been arrested on suspicion of pulling the rug at ZKasino earlier this week.

Dutch authorities began investigating a $33 million cryptocurrency gambling platform fraud case on April 25, according to a press release. The criminal investigation began with online reports from the cryptocurrency community and information from FIOD’s intelligence division.

Staff from Binance’s Financial Crimes Compliance team assisted in the FIOD investigation and helped “secure millions of euros worth of cryptocurrencies.” Similarly, the Prosecutor’s Office helped the investigative team contact members of her ZKasino team.

On April 29, FIOD arrested a man on suspicion of “fraud, embezzlement, and money laundering.” The suspect’s detention was extended for 14 days for “investigative purposes” after he was produced before a magistrate.

As part of the investigation, authorities searched the suspect’s home and seized various assets worth approximately 11.4 million euros (approximately $12.25 million). FIOD seized real estate, luxury cars, and various virtual currencies.

Dutch authorities have not ruled out further arrests, as recovering and returning the victims’ stolen money will require the cooperation of the fraudsters involved.

ZKasino, was it a scam from the beginning?

As Bitcoinist reported, rumors of a crypto gambling platform scam began in March when decentralized exchange (DEX) ZigZag made serious accusations against the project. According to competing cryptocurrency exchanges, ZKasino failed to pay developers and other contractors who helped build the platform.

Additionally, Zigzag claimed that the financing and project valuations were likely false. The same post added that the previously announced $40 million ecosystem is not real and will likely never be paid in real currency.

Despite the alarm bells, confidence in cryptocurrency projects did not completely collapse until April 20th. Users began reporting suspicious activity after changes started appearing on the website.

As one X user previously pointed out, “How does Bridge make money?” The platform section stated that bridged Ethereum will be returned to investors when the chain and its native token, ZKAS, are up and running. However, this part of the text is said to have been deleted.

It is worth noting that ZKasino led investors to believe that their investments would be returned within 30 days. The team promised that bridged Ethereum could be withdrawn on a 1:1 basis. Instead, the user found his funds locked in his ZKAS with a vesting period of 15 months.

Concerns grew after the bridge was completed. can’t access After the chain is up and running. The team later claimed that it was “down for maintenance and will be reworked in time for this launch.”

The project’s X account continued to post updates until April 24, when Bridge announced it was back up and running. Despite user complaints about stolen funds, the post added that users can “transfer $ZKAS from the ZKasino chain to Ethereum, etc.”

after this final post And by not handling the situation, users confirmed their suspicions that they had been rough. FIOD’s investigation pointed out that ZKasino’s promises were never meant to be kept, as the smart contract setup suggested that the fund’s “returns were never 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

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