A wallet associated with the $40 million ZKasino fraud has lost over $27 million following the liquidation of a leveraged position, which many in the crypto community are labeling a case of karmic retribution.
ZKasino was launched in April 2024, enticing investors with the promise of an airdrop of its native token for users who transferred Ether (ETH) to the platform.
However, rather than refunding the funds, ZKasino redirected approximately $33 million in user ETH to the staking platform Lido Finance.
Source: Onchain Lens
“A scam artist gets a taste of karma,” the analytics platform noted in a post, adding:
“The ZkCasino scammer, who swindled over $40M, closed their $ETH (20x) position on #Hyperliquid, incurring a total loss of $27.1M.”
After this liquidation, affected users seem no closer to recouping their investments.
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The liquidation follows a series of unprecedented sell-offs in traditional equity markets that triggered a correction in the crypto market, pushing ETH’s price down to a near two-year low of $1,480, the lowest since May 2023.
Source: Lookonchain
Earlier on April 7, an unidentified crypto whale had to make a $14 million emergency deposit to prevent an over $340 million liquidation of Ether.
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The ZKasino exit scam
In response to accusations of running an exit scam, ZKasino claimed it had begun a 72-hour process to return funds to investors, a month after transferring $30 million in user assets to Lido.
“We are now starting the two-step process for users to bridge back their ETH at a 1:1 ratio,” ZKasino stated in a post, emphasizing that the team is still committed to the project.
However, any investors who wish to retrieve their ETH would lose any allocated ZKAS tokens and the remaining 14 months of ZKAS distributions, according to ZKasino.
On April 29, 2024, Dutch authorities apprehended one individual suspected of being involved in the “rug pull.” Shortly thereafter, all bridged ETH was returned to the ZKasino multisig wallet, as a public figure denied the rug pull allegations.
Despite this, ZKasino has yet to return the ETH nearly a year following the incident.
“Unfortunately, everyone who sent back their ZKAS has not received any communication from them yet,” one user, wishing to remain anonymous, told a publication in August 2024.
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