Binance Investigation Team Cracks Down on ZKasino Scam, Ensuring Recovery of Stolen Funds
Summary:
The investigative team at Binance, the world's leading cryptocurrency exchange, collaborated with law enforcement to identify and arrest the suspect behind the ZKasino scam. A variety of techniques, including on-chain tracking and open-source intelligence, were used to identify the perpetrator. The suspect, a 26-year-old individual involved in creating fraudulent ZKasino smart contracts, was arrested on April 29 with over $12.2 million worth of asset seizures. It is noted the role of the crypto community was significant in unveiling his identity. Despite the arrest, the funds continue to be moved on-chain, suggesting more perpetrators were implicated in the scam. Binance commits to continuing its collaboration with authorities to ensure the return of the seized funds to investors.
The world's leading cryptocurrency exchange, Binance, has made significant strides in cracking down on the Zkasino scam suspect, driven by its on-chain investigation component. Binance's Fraud Compliance and Investigations department was spurred into action by an outcry from the community, focusing on the suspicious betting platform. The team employed a blend of on-chain probing and open-source intelligence (OSINT) techniques to detect the scamster, as reported to Cointelegraph by the Binance Investigations Team. A comprehensive review of all ZKasino's smart contracts was conducted to trace the individual behind the contract and those managing the addresses.
Binance, after unmasking the suspect associated with the smart contracts, passed on the identity of the fraudulent account holder to law enforcement. Following this tip-off, the Fiscal Information and Investigation Service (FIOD) positioned the 26-year-old suspect under arrest on April 29, confiscating over $12.2 million worth of cryptos, lavish vehicles, and property, according to a May 3 FIOD statement. In the ZKasino fraud incident, where a total of $33 million in digital assets was swindled off investors, this constitutes the opening arrest. The platform made the initial promise of the return of users' investments within 30 days.
However, Dutch authorities suggest that the smart contract signaled that the platform had no intention of giving back the money. Binance successfully disabled the stolen crypto worth millions of dollars in the wake of the ZKasino fraud, once law enforcement issued a warrant for the fraudster's accounts. Binance's investigation squad mentioned the collaboration with law enforcement to trace one of the suspect's accounts. Consequently, a substantial amount of funds were recovered, but the major component of the ZKasino case remains unresolved.
The Binance probe team has further aided Dutch authorities in on-chain forensics, helping to track the flow of money and decode how the malicious ZKasino smart contracts were configured. The Zkasino scam, a form of exit scam, lured more than 10,515 Ether (ETH) from over 10,000 investors before the deployer of the smart contract began covertly draining user funds.
The importance of the crypto community in the arrest of the Zkasino suspect and unveiling his identity was emphasised by Binance's investigation team. Derivatives Ape, the supposed scammer behind the rug pull and anonymous ZKasino developer, was suspected by crypto investors, including well-known crypto analyst FatMan, a suspicion Binance later verified.
A series of comments made by the suspect on X have noticeably assisted the community in identifying the fraudster, as per Binance's Investigation Team. The comments intimated a strange interest in experiencing jail time for one to two years. Even following the arrest, funds continue to be transferred on-chain, indicating that more perpetrators were implicated in the rug pull. Binance's Investigation team remains committed to partnering with the authorities to ensure the return of the seized funds to investors.
Published At
5/8/2024 1:52:41 PM
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