The individual accused of orchestrating the ZKasino rug pull has reportedly incurred losses exceeding $27 million through a high-stakes Ethereum trade as the cryptocurrency market experiences volatility that is affecting overleveraged traders.
On April 7, blockchain analytics firm Onchain Lens disclosed that the alleged scammer had exited a 20x leveraged long position in ETH via the Hyperliquid trading platform.
This financial setback is thought to have arisen from Ethereum’s recent price correction during a wider market downturn, spurred by the US’s decision to impose reciprocal tariffs on 180 nations.
Data indicates that Ethereum plummeted nearly 20% within a 24-hour period, hitting a low of $1415 before making a tentative recovery above the $1500 mark. As of the last update, ETH was trading at $1537.
Many within the cryptocurrency community perceive the recent trading loss by the ZKasino scammer as a significant instance of “karma.”
This situation mirrors an incident from March 31, when a hacker responsible for the $9.6 million ZkLend exploit lost 2,930 ETH to a phishing site that imitated Tornado Cash. This individual had also overlooked a bounty offer from ZkLend.
ZKasino Scam
The funds used in the trade are believed to originate from a prior exploit linked to ZKasino, which occurred in 2024. The platform faced severe criticism after executing a rug pull that siphoned nearly $33 million worth of Ethereum from users.
ZKasino’s actions drew sharp rebuke from within the industry. Ethereum co-founder Vitalik Buterin criticized the project, asserting that its use of “ZK” branding was misleading and based solely on its implementation on zkSync.
In response to the backlash, ZKasino pledged to refund investors, asserting it acted in users’ interests by converting ETH into ZKAS tokens and locking them under a 15-month vesting schedule.
As of the latest updates, however, the promised refunds have not yet been issued.
Meanwhile, the Netherlands’ Fiscal Information and Investigation Service (FIOD) arrested a 26-year-old individual suspected of being involved in the scheme. Authorities seized digital assets, luxury vehicles, and properties valued at around $12.2 million.
Mentioned in this article
