Key Points
- The investigation team behind Binance reportedly played an important role in ZKasino’s scam suspect arrest.
- More arrests could follow, according to authorities.
The ZKasino fraud case stepped into the spotlight after investors lost at least $33 million in crypto.
According to FIOD (The Fiscal Information and Investigation Service, an agency of the government of the Netherlands responsible for investigating financial crimes), Zkasino presented itself as a gambling platform and blockchain casino.
The platform has reportedly initially promised users the return of their investment within 30 days, but, according to Dutch authorities, the smart contract suggests that the platform never intended to return the funds.
FIOD’s official notes reveal that such a move could indicate a modus operandi called rug pull. The notes offer an explanation of what a rug pull is. Devs of certain crypto projects raise investments for their projects and a certain amount in crypto is often offered in return. This can be compared to buying shares in a company.
Often, devs also own a high percentage of the tokens. In a “rug pull,” the project suddenly stops, and large amounts of the tokens are sold/dumped by devs, causing the price of the shares to drop. The devs then disappear with the money, leaving investors with tokens worth little to nothing.
Over 11 million euros seized, suspect arrested
According to official FIOD reports, on April 29, a 26-year-old man suspected of fraud was arrested for fraud, money laundering, and embezzlement suspicions. The investigation focused on a large-scale scam surrounding the ZKasino platform, which led to over 30 million in crypto being invested by victims all over the world.
In the official investigation, a house was searched, and digital data carriers were seized. More than 11,4 million euros worth of various assets, including real estate, a luxury car, and various crypto, were seized.
The suspect was brought before a magistrate, and his detention was extended by 14 days for further investigation.
Criminal investigations started following info from intelligence departments of the FIOD and reports on the social media platform X, formerly known as Twitter.
FIOD’s official notes reveal that the investigation was assisted by staff from the Financial Crime Compliance and Investigations Team of crypto exchange Binance. They reportedly helped secure millions of euros in crypto.
It is believed that more arrests could follow, and in order to return the millions deposited by victims, people involved in the fraud have to cooperate.
Binance’s role in the arrest
The on-chain investigation team behind Binance played an important role in leading law enforcement to arrest the suspect in the ZKasino case.
Community outrage first promoted Binance’s Crime Compliance and Investigations team to inquire into the fraudulent platform.
Researchers used a combination of on-chain tracking and open-source intelligence info to find the attacker. Binance stated recently that they have looked into all the smart contracts for ZKasino in a type of behavioral network study in order to find out who was behind the contract, but also who were the signers behind the addresses.
After identifying the suspect, Binance alerted law enforcement to the ID of the account holder who committed the fraud.
This marks the first arrest in the ZKasino’s fraud case. Binance further assisted the Dutch authorities with on-chain forensics, helping them understand the way in which the malicious smart contracts were set up and identifying the flow of funds.
Binance shared a post on their X account, saying that they are proud to have been able to help. They also noted that this is part of the ongoing commitment to helping authorities identify bad actors.
https://twitter.com/binance/status/1788431387999244589
The crypto community’s help addressed
The Binance investigation team also noted that the community played an important role in this arrest and his ID reveal.
According to reports, crypto investors, including the popular analyst FatMan, have suspected that the scammer behind the exit scam was the pseudonymous ZKasino builder Derivatives Ape, which was also confirmed by Binance.
Despite the arrest, the funds have reportedly continued moving on-chain, which could mean more other potential attackers involved. Binance’s investigation team will continue its collaboration with the authorities in order to make sure that funds are returned to investors.
Binance’s Investigations unit manages risks and works with law enforcement to protect users and the entire crypto space from criminals.
