April 25, 2024

The analysis of Beosin KYT on the ZKasino Rug for $33 million

On April 21st, ZKasino, which had previously received 10,515 ETH (approximately $33.2 million), transferred the ETH assets deposited by the user to the 0x791 multi-signature address, and then deposited them into Lido to earn yield.

It only took ZKasino less than a month to go from a star project with a Series A valuation of $350 million to the current high-risk Rug project that is full of FUD. Today, Beosin will analyze this soft-rug scandal involving more than $33 million through KYT.

1. The ZKasino team and its background

Team + narrative is the reason why ZKasino has been able to gain great attention from the market in a very short period of time. However, what users who participated in the platform’s bridging reward activities did not expect was that the project team chose to do evil after facing such a huge amount of deposits. .

Team background: Founding member of Zigzag

The personal Twitter accounts of the two founding members of ZKasino are Prometheus and Derivatives Monke. The two previously participated in Zigzag Exchange, a well-known DEX project on zkSync that raised US$15 million. The project experience brought by participating in mature projects has made many users have high hopes for the two, and thus they have also established a certain degree of trust in ZKasino.

On March 19, ZKasino announced the completion of Series A financing with a valuation of US$350 million, with participation from MEXC, Big Brain Holdings, Trading_axe, Pentoshi and 0xSisyphus. In this way, with a mature team and brilliant financing, a "star project" began its performance.

Hot narrative: from decentralized betting platform to on-chain gaming Layer2

In the early days of its launch, ZKasino was based on the market as a decentralized betting platform. Previously, the platform has launched gambling game activities and sweepstakes many times, and supports fund betting from multiple networks including Polygon and Arbitrum.

On March 12, ZKasino announced that after 10 months of operation, the ZKasino platform had a total revenue of US$6.9 million in profit, the total number of users exceeded 35,000, the total number of bets exceeded 6.9 million, and the total bet amount exceeded US$390 million. It will launch its own super chain. "

Since then, ZKasino has transformed and successfully realized its narrative transition from a gambling platform to a gaming chain.

On March 16, ZKasino stated that the ZKasino Bridge will be launched soon, and you can get ZKAS token rewards by participating in the fund bridging activity. Subsequently, ZKasino posted several times, not only stating that the earlier users deposit funds, the more token rewards they can get, but also launched a rebate mechanism to encourage users to invite more people to join.enter.

On April 5, ZKasino officially tweeted that the current bridge deposit funds have exceeded 10,000 ETH.

On April 11, ZKasino announced that it will soon launch the IDO platform Ape Terminal.

Rug signal: risk capital participation, arbitrary changes to platform rules

On April 20, ZKasino deleted the sentence "Ethereum will be returned and can be bridged back at this point." mentioned in the introduction of Bridge funds on the Bridge interface of its official website. Users who belatedly thought of checking whether the funds they deposited could be withdrawn, but the result was obviously disappointing. At this time, the last update of the ZKasino official account was 4 days ago. For a time, the news that ZKasino Rug gradually spread.

To check ZKasino deposit contract through Beosin KYT, it can be found that a large amount of funds related to gambling and blacklisted addresses are deposited into its contract address in an attempt to clean the funds. Institutions or users should pay attention to whether there is an inflow or outflow of high-risk funds when conducting due diligence on a project or conducting capital risk control on the project itself.

2. Event progress: IDO cancelled, investment institutions speak out

Many victims are waiting for ZKasino's official announcement. While responding, they also transferred their anger to the previous IDO platform and investment institutions.

Listing Exchange: Canceled ZKasino Listing Plan

On April 20, MEXC exchange announced the cancellation of the listing of ZKasino (ZKAS). This is also regarded by many as an important reason why the ZKasino Rug, causing FUD to intensify subsequently.

IDO platform: Pay close attention and refund later

On April 21, Ape Terminal stated that due to ZKasino’s recent situation, its IDO has been canceled. All participants will receive refunds and stablecoin claims are now online.

3. Latest progress: The project continues, but there is no explanation of the whereabouts of the funds.

As of the time of writing, ZKasino’s official statement mainly includes the following:

(1) The ZKasino network will still be online, but the listing of the currency on the exchange will be delayed.

(2) All ZKasino games will be ported to the new chain - they will remain on Arbitrum and Polygon. Soon, native DEX and stablecoins will also be launched. The first batch of ZKAS tokens will also be distributed to bridge event participants.

(3) The Zkasino chain will integrate EIP-3074 when it goes online.

However, ZKasino still did not mention the whereabouts of the funds previously deposited by users and subsequent arrangements.

Looking at the addresses related to this incident, the ZKasino project all used new addresses, and one of the addresses withdrew funds from the Binance exchange. If the subsequent ZKasino incident is not properly handled, it will require the coordinated cooperation of exchanges, security companies and law enforcement agencies to recover the victims' assets.

Currently, Beosin KYT has monitored relevant addresses and issued real-time warnings for all the addresses' activities.

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