Alleged $3.5 Million Scam Sparks Concern: Gemholic Project on zkSync Network Under Scrutiny
Summary:
Concerns are emerging in the cryptocurrency community regarding a suspected scam by the Gemholic project on the zkSync network. Allegedly, the project deceived investors, promising refunds, then engaged in a 'rug pull' tactic once funds were unlocked. NSerec, founder of Zkmarkets, has revealed the suspected swindle involving $3.5 million. Despite the accusation, KYC provider SolidProof has remained silent, leading NSerec to question their service credibility. The issue stems from a mistake in the sales contract of Gemholic that locked their funds, which were finally unlocked following a zkSync upgrade on June 7.
Concerns are rife in the cryptocurrency domain due to an alleged scam related to the Gemholic project and the zkSync network, which is causing much discontent. In light of this speculation, numerous individuals affected by what they believe is a scam associated with Gemholic have used X, a social platform, to promote awareness. NSerec, Zkmarkets' originator, has verified that Gemholic allegedly swindled $3.5 million. In his post on X, NSerec stated that Gemholic had misled its investors for a year with the promise of refunds, executing what seemed to be a fraudulent tactic after the funds were finally released. The deceptive act, according to NSerec, was reportedly backed by Binance, and he encouraged those with insights on Binance’s potential assistance to connect with them.
Despite passing a verification process with KYC (Know Your Customer) provider SolidProof, the company stayed suspiciously silent regarding the issue, which NSerec suggests might be an attempt to avoid spreading fear, uncertainty, and doubt among investors. Source: Swift Defi
NSerec argues a KYC provider should, in such a circumstance, confess their negligence in thoroughly examining the involved parties, or else report the culprits to the appropriate authorities whilst informing the public of the occurrence. He puts forth that if SolidProof continues to disregard this matter, they'll lose their credibility as a trusted service.
Related: StarkWare launches $1M research fund for ZK Bitcoin scaling
SolidProof's responsibility to deal with the alleged Gemholic scam is stressed by the founder of Zkmarkets, stating the aggrieved should hold SolidProof accountable. If not acted upon, he urged people to rename them from “SolidProof” to “UselessProof.”
Background
Due to an error in the sales contract, the zkSync-related project, Gemholic, had its funds suspended over a year. Matter Labs, the team at the helm of Ethereum's second layer scaling solution zkSync, traced the root of the problem to the .transfer() function within the GemstoneIDO smart contract; part of a venture deployed by the GemholicECO ecosystem.
On June 7, v24 upgrade completion by zkSync addressed the issue and unlocked the previously inaccessible funds. Post-upgrade, the Gemholic project withdrew 921 Ether (ETH) from the contract transferring to the Ethereum blockchain. The X account of Gemholic along with all messages on Telegram had been annulled when last checked.
Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance.
Published At
6/8/2024 3:05:07 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.