ZKasino’s $31m ETH returned to team wallet after founder’s arrest

Following the arrest of a suspected ZKasino founder last week, millions in staked Ether previously bridged were returned to the team’s original multi-sig wallet. 

On May 9, Etherscan data showed ZKasino’s team wallet holding about 10,531 Lido staked Ether (stETH) worth some $31.4 million at current market prices. The funds were previously moved to private wallets purportedly controlled by at least one founder of the project after users noted that withdrawals were disabled. 

As crypto.news reported, Binance helped law enforcement in tracing the funds. Aid from the crypto exchange supported the Dutch Fiscal Information and Investigation Service (FIOD) in making an arrest late last month. 

An unnamed suspect was detained and FIOD agents seized assets including a $12 million luxury automobile.  Despite the arrest, ZKasino funds continued to move on-chain and fueled theories that multiple individuals were involved in what many have labeled an exit scam, commonly known as a rug pull in crypto. 

ZKasino denies Binance “FUD” 

After the news broke, and funds mysteriously returned to the ZKasino multi-sig wallet, a pseudonymous developer associated with the project refuted the claims by Binance and the larger crypto community. The personality operating under the monicker “Derivatives Monke” on X, explicitly stated that the claims were “false and damaging to the ZKasino brand”. 

We would like to assure everyone that we will continue our best efforts like we have for the past 3 years and that we will continue making the project succeed.

The statement received heavy backlash from users and observers who said the cryptocurrency betting platform had broken the trust of its over 10,000 users. On-chain analytics provider Nansen also questioned Derivatives Monke on why the assets were moved during the Eigenlayer airdrop saga, and then returned after an arrest in the Netherlands.