Binance, one of the world’s leading crypto exchanges, has played a crucial role in assisting law enforcement in the arrest of a suspect linked to the ZKasino scam.
The outcry from the community prompted Binance’s Crime Compliance and Investigations team to launch an inquiry into the fraudulent gambling platform.
Using a combination of on-chain tracking and open-source intelligence (OSINT) methods, the researchers were able to trace the perpetrator, as stated by the Binance investigations team:
“We conducted a thorough examination of all ZKasino smart contracts, employing behavioral network analysis to uncover the individuals behind the contracts and their associated addresses.”
Once the suspect behind the smart contracts was identified, Binance alerted law enforcement authorities about the account holder responsible for the scam.
On April 29, the Fiscal Information and Investigation Service (FIOD) apprehended the 26-year-old suspect and seized digital assets, real estate, and a luxury car valued at $12.2 million, according to a FIOD report dated May 3.
This marks the first arrest in the ZKasino fraud case, which resulted in investors losing at least $33 million in digital assets. According to the FIOD report from April 29:
“ZKasino purported to be a gambling platform and blockchain casino. Investors were led to believe they would receive their investments back within 30 days.”
However, Dutch authorities suspect that the smart contract indicated the site never had intentions to return the funds.
Binance successfully froze millions of dollars in cryptocurrency stolen through the ZKasino rug pull after law enforcement obtained a warrant against the attacker’s accounts.
Additionally, Binance’s investigations team aided Dutch authorities in conducting on-chain forensics to trace the flow of funds and understand how the fraudulent ZKasino smart contracts were established.
The ZKasino rug pull, commonly referred to as an exit scam, saw over 10,000 investors lose at least 10,515 Ether before the smart contract deployer began siphoning off user assets silently. The project team also shut down the Telegram channel and halted fund withdrawals.
According to Etherscan data, over $32 million in user assets were transferred to another address before being routed to the Lido Finance liquid staking protocol.
Following the incident, the MEXC crypto exchange delisted the native token of the ZKAS project, and the Ape Terminal platform canceled the initial coin offering. VC firm Big Brain Holdings also distanced itself from ZKasino, asserting it had never directly invested in the crypto casino.
Binance’s investigations team emphasized the vital role played by the community in apprehending the ZKasino suspect and unveiling their identity.
Some crypto investors, including prominent analyst FatMan, suspect that Derivatives Ape, a pseudonymous ZKasino builder, was the mastermind behind the scam.
Despite the arrest, funds have continued to move on-chain, indicating that more than one attacker may have been involved in the rug pull.
Binance’s Investigations team remains committed to collaborating with relevant authorities to ensure stolen funds are returned to investors. This investigation is ongoing, and according to the FIOD, “additional arrests are not ruled out.”
Summary Review: Binance’s pivotal role in assisting law enforcement to apprehend a suspect linked to the ZKasino scam underscores the importance of collaboration between cryptocurrency exchanges and authorities in combating fraudulent activities within the crypto space. The investigation, led by Binance’s Crime Compliance and Investigations team, utilized sophisticated techniques to trace the perpetrator behind the fraudulent gambling platform. While the arrest marks a significant milestone in the case, the ongoing movement of funds on-chain suggests the possibility of additional perpetrators involved in the scam. Binance remains committed to working closely with relevant authorities to ensure that stolen funds are recovered and returned to affected investors. As the investigation continues, vigilance from the crypto community and collaborative efforts between exchanges and law enforcement will be crucial in addressing and preventing similar fraudulent schemes in the future.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
