- A ZKasino-linked wallet liquidated for $27 million.
- Investors have been waiting for a refund since last year.
- The crypto market lost over $240 billion overnight.
A crypto wallet linked to ZKasino, the crypto gambling platform that disappeared last year with $40 million in investor funds, got liquidated for over $27 million during Sunday’s crypto wipeout.
The wallet, which had been sitting on a high-risk Ethereum position since last month, finally tipped over as Ethereum plunged below $1,500 — its lowest price in two years.
ZKasino’s liquidation was just one among many. As panic rippled through the markets, leveraged positions across DeFi began to unwind. One major trader, unrelated to ZKasino, lost $74 million in the same cascade. Others narrowly avoided liquidation by rushing to reinforce their collateral as prices plunged.
Whoever was still gambling with ZKasino’s stolen funds was forced to close the position — but not before being margin-called into oblivion and losing $27 million in the process.
That may have been a darkly poetic end to a year-long saga for ZKasino. But for investors, there’s little consolation. Instead of the refunds they were promised, they’ve endured silence, stalling, and now, the final flush of whatever was left.
ZKasino was launched last April as a flashy, onchain gambling project. It attracted over $40 million in Ethereum from investors who were promised yield on top of their deposits.
But instead of payouts a month later, the project changed course and said it would swap Ethereum deposits for its native cryptocurrency called ZKAS. The project called the swap “a favour” for early investors.
However, investors were not pleased with the change as it meant they would not be able to redeem their investments in full as they were initially promised.
ZKasino then converted $30 million in user deposits into Lido’s Wrapped Staked Ether and began earning staking yield on the funds while investors were left in limbo.
Then came allegations of a rug pull ― a form of crypto crime where team members disappear with pooled funds, leaving investors in the lurch.
Dutch authorities eventually stepped in and arrested a man in connection with the alleged scam.
ZKasino denied the allegations and eventually converted the funds back to Ethereum, announcing a vague repayment plan. But nearly a year later, nothing has been paid back.
Now, with the liquidation of the last major wallet, that plan looks as precarious as the promises behind it.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.