In a notable crackdown on crypto fraud, the Dutch anti-fraud agency FIOD has arrested a 26-year-old man.
He is suspected of fraud, embezzlement, and money laundering concerning the ZKasino rug pull, marking a critical development in combating crypto-related scams.
Dutch Agency Investigates ZKasino Rug Pull
FIOD initiated a rigorous investigation on April 25, spurred by alerts from X (formerly Twitter) and intelligence from their departments. The focus was a significant rug pull involving the gambling platform ZKasino, where over $32 million was invested by global victims.
“Investors were led to believe that they would get their investments back within 30 days. That did not happen. The smart contract was set up in such a technical way that suggests that this return was not intended,” FIOD wrote.
Read more: What Is a Rug Pull? A Guide to the Web3 Scam
During the operation, authorities searched a residence and seized various digital data carriers. Assets confiscated included over €11.4 million (~ $12.2 million) in real estate, a luxury car, and diverse cryptocurrencies.
The agency presented the suspect before a magistrate. Consequently, they managed to extend the suspect’s detention by fourteen days to allow further investigation.
Moreover, FIOD worked closely with Binance’s Financial Crime Compliance and Investigations Team to secure millions in cryptocurrencies. This collaboration highlights the growing synergy between law enforcement and cryptocurrency platforms in addressing financial crimes.
Additionally, FIOD believes there are probabilities for more arrests, as investigation evolves.
The allegations against ZKasino have drawn severe criticism from industry experts, including Ethereum co-founder Vitalik Buterin. He criticized the platform for its fraudulent misuse of zero-knowledge proofs, stressing that emerging technologies are increasingly becoming buzzwords exploited by scammers.
“There is nothing “ZK” about ZKasino except that it lives on zksync, correct? I guess we have to adapt; even “ZK” is now a mainstream enough buzzword that full-on scammers are adopting it,” Buterin remarked.
Additionally, ZKasino faced serious accusations from ZigZag Exchange last month, which charged its developers with diverting development funds for personal use. Although these claims initially attracted little attention, the escalating complaints from the crypto community brought the issues to prominence.
ZigZag also alleged that ZKasino made false claims about its funding and failed to compensate many developers and contractors.
Read more: Crypto Scam Projects: How To Spot Fake Tokens
In response to the unfolding controversy, significant players in the cryptocurrency market took decisive action. Notably, the MEXC exchange canceled its planned token listing for ZKasino to protect its users’ rights, while Ape Terminal canceled its Initial DEX Offering linked to ZKasino, assuring refunds to all participants.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
