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Return of $20M in ETH to ZKasino Sparks Hope for Refunds After Exit Scam Accusations

Unexpected return of stolen funds to ZKasino wallet

Significant recovery of stolen Ether in the ZKasino case has renewed hopes for restitution among victims, highlighting ongoing issues of trust and security in the cryptocurrency space.

Key takeaways:

  • A substantial amount of stolen Ether was unexpectedly returned to ZKasino's multisignature wallet, raising prospects for refunding victims of the alleged exit scam.
  • The return of funds comes amid ongoing investigations and after significant assets were seized by authorities from a suspect involved in the scam.
  • The incident underscores the persistent challenges and risks associated with cryptocurrency investments and the importance of enhanced protective measures.

Over $20 million worth of wrapped Lido staking Ether (wstETH) has been returned to the multisignature wallet of ZKasino, a blockchain-based gambling project. This move comes nearly three weeks after the platform was embroiled in controversy with users accusing the founders of an exit scam. The recent transaction involved 6,021 wstETH, approximately two-thirds of the total amount that disappeared during the alleged scam.

This event was initially reported by an X feed dedicated to recovering funds from the ZKasino scam, which noted that the returned funds sparked hopes among investors that they might soon receive refunds as initially promised by the platform. The return of such a substantial amount raises questions about the intentions behind the move and whether it signals a potential preparation to reimburse the affected users.

Details of the incident and ongoing investigations

ZKasino had attracted attention on April 20 by offering an airdrop of its native token, ZKAS, to users who bridged ETH to the platform. Despite promises to return the bridged ETH, the funds were instead transferred to the staking protocol Lido Finance, leading to allegations of an exit scam. Over 10,000 individuals had participated based on the platform's initial pledges.

Following these events, Dutch authorities arrested a 26-year-old man on April 29, suspecting his involvement in the ZKasino scam. During the arrest, assets including cryptocurrencies, real estate, and luxury vehicles worth approximately $12.2 million were seized. There was speculation within the crypto community that the arrested individual might be the project founder, known under the pseudonym "Derivatives Monke," who was identified as Elham Nourzai by blockchain detectives.

Binance played a role in the situation by freezing millions of dollars worth of stolen crypto following a seizure warrant issued against the attacker's accounts. Despite the arrest, there have been indications that other suspects may still be active, as illicit fund transfers continue to be observed on the blockchain.

The return of the funds to ZKasino's wallet has injected a renewed sense of hope among the victims, amidst an environment where cryptocurrency scams and hacks remain prevalent. According to CertiK, a firm specializing in on-chain intelligence, April witnessed $25.7 million in losses due to cryptocurrency scams and hacks, marking the lowest figure since the firm began tracking in 2021.