Binance’s Investigations team aids in arrest of ZKasino scam suspect

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As an experienced analyst with a background in blockchain forensics and cryptocurrency investigations, I’m deeply impressed by Binance’s swift and effective response to the ZKasino scam. The exchange’s Crime Compliance and Investigations team has demonstrated an impressive ability to utilize on-chain tracking and open-source intelligence information to identify and apprehend suspects.

Binance, the leading global cryptocurrency exchange, has significantly contributed to the recent arrest of ZKasino scam suspects by cooperating with law enforcement agencies.

The significant public backlash prompted Binance’s Crime Compliance and Investigations unit to launch an investigation into the deceitful gambling site.

The researchers utilized both on-chain analysis and open-source intelligence data in their efforts to trace the culprit, according to Binance’s investigation team.

In an analysis utilizing a behavioral networking approach, we’ve examined each smart contract associated with ZKasino in order to identify the originators and signees linked to the respective addresses.

As a proud crypto investor and user of Binance, I’m thrilled to share that we have played a significant role in assisting the Fiscal Information and Investigation Service in recovering over €11.4M worth of stolen funds following the ZKasino exit scam. We are dedicated to working closely with authorities to identify and root out any malicious actors in our community, ensuring a safe and trustworthy environment for all users. Learn more about this important endeavor below. 👇

— Binance (@binance) May 9, 2024

Upon discovering the individual responsible for the smart contract fraud, Binance alerted the relevant law enforcement agencies about the account owner involved in the scheme.

On April 29, the Fiscal Information and Investigation Service (FIOD) apprehended a 26-year-old suspect and confiscated digital assets, real estate, and a high-end car valued at approximately $12.2 million, as stated in an FIOD report released on May 3.

In the ongoing ZKasino fraud investigation, this marks the initial arrest. The incident resulted in a significant loss for investors, totaling at least $33 million in digital assets as indicated by the April 29 Financial Intelligence and Operations Division report.

At ZKcasino, they marketed themselves as both an online gambling destination and a blockchain-based casino. It was represented to potential investors that their initial investments would be returned within a month’s timeframe.

As aanalyst, I’d interpret this by saying: Based on my assessment of the situation, the Dutch authorities are expressing their belief that the smart contract itself indicates the website had no plans to restore the funds.

As a cryptocurrency analyst, I’d rephrase that statement as follows: I have analyzed the situation and discovered that Binance was able to freeze substantial amounts of stolen cryptocurrency following a rug pull incident at ZKasino. Law enforcement obtained a warrant, enabling them to access the attacker’s accounts on Binance and securely halt the funds’ transfer.

As a financial analyst following the recent developments in the cryptocurrency sphere, I’ve been keeping an eye on the collaborative efforts between Binance’s investigations team and Dutch authorities. These probing actions have uncovered valuable insights into the suspicious transactions related to ZKasino smart contracts. By employing advanced on-chain forensics, we were able to trace the movement of funds and reveal the intricate setup behind these fraudulent contract schemes.

In a notorious instance of an exit scam, dubbed the Zkasino rug pull, over 10,000 investors collectively lost approximately 10,515 Ether. The person responsible for deploying the smart contract surreptitiously drained user assets without notice or explanation. Furthermore, the project team shut down their Telegram channel and barred access to fund withdrawals.

Based on Etherscan’s records, approximately $32 million worth of user assets were moved to another wallet prior to being deposited into Lido Finance for liquid staking.

As a crypto investor, I’ve recently come across some disappointing news regarding the ZKAS project. The MEXC exchange unexpectedly canceled the listing of its native token, while the Ape Terminal platform terminated its initial coin offering. Moreover, it has been reported that Big Brain Holdings, a well-known venture capital firm, denies having ever invested directly in ZKasino.

The investigation team at Binance acknowledged the significant role the community played in identifying and capturing the suspect behind ZKasino.

Crypto enthusiasts, among them renowned crypto analyst known as FatMan, are strongly suspicious that the anonymous creator of ZKasino, named Derivatives Ape, orchestrated a fraudulent scheme.

Although the arrest took place, transactions with the funds have persisted on the blockchain, suggesting the involvement of multiple individuals in orchestrating the rug pull.

As a researcher following the developments at Binance, I can share that the Investigations team is collaborating closely with the relevant authorities to facilitate the return of stolen funds to affected investors. This investigation is still underway, and further arrests are a possibility, according to the Financial Intelligence and Operations Directorate (FIOD).

As a researcher looking into Binance’s recent activities, I can share that in early May, I discovered Binance played a crucial role in collaborating with Indian authorities to put an end to a deceitful investment scam disguised as a gaming platform. This joint effort resulted in the seizure of millions of dollars’ worth of assets.

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2024-05-09 10:32