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In a dramatic turn of events that’s being celebrated as a moment of karmic justice, a crypto wallet associated with the infamous US$40 million ZKasino scam has been cleaned out for over US$27 million. Liquidation followed after a precipitous decline in Ether (ETH) prices prompted the failure of an over-leveraged position, over 11 months after investors were reportedly cheated in one of 2024’s most notable exit scams.
ZKasino opened for business in April of last year with grand claims and aggressive rewards, chiefly an airdrop of its native ZKAS token to those who bridged Ethereum to the platform. Rather than refunding the money, the project diverted approximately US$33 million of ETH to staking protocol Lido Finance, igniting widespread anger and accusations of fraud.
On April 7, blockchain analytics company Onchain Lens reported that the wallet associated with the exploit had been liquidated for US$27.1 million on the Hyperliquid exchange after ETH dropped to a near two-year low of US$1,489. The wallet is said to have held a 20x leveraged ETH position, which could not survive the market collapse brought about by global equity sell-offs.
Though promising a 72-hour refund window and two-step bridge-back in Amy 2024, ZKasino required investors to surrender their ZKAS tokens and the rest of the 14-month token release schedule in order to claim their ETH back. Almost a year on, victims claim to have received nothing back, with one user confirming in August that no word had been heard back after returning ZKAS tokens.
Dutch authorities detained a suspect in the alleged rug pull in April 2024, and while the bridged ETH was returned to the ZKasino multi-sig wallet, the assets are still frozen. In other news, while one wallet went up in flames, another just dodged a similar fate, an anonymous crypto whale had to inject US$14 million to prevent an eye-watering US$340 million liquidation on the same day.
Though the liquidation provides a sense of poetic justice for some, the larger crypto community is doubtful. For victims still waiting for refunds, the hurt of betrayal persists, evidence that karma can catch up with you, but justice has a way of falling behind.
