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ZKasino Scammer Loses $27.1 Million in Liquidated Ethereum Position

An account linked to ZKasino, a gambling platform accused of stealing over $30 million from users in 2024, suffered a massive loss of $27.1 million after its leveraged Ethereum position on Hyperliquid was liquidated.

On-Chain Data Reveals Liquidation Details

According to on-chain data from Hyperdash, the account associated with the blockchain-based betting platform had taken a 20x leveraged long position on Ethereum (ETH) using Hyperliquid. The position was fully liquidated, resulting in a loss of approximately $27.1 million. Despite the liquidation, the account still holds around $147.38 in unrealized profit and losses.

The address linked to the scammer is reportedly the same one behind ZKasino, which allegedly stole $32 million from users last year. News of the liquidation sparked reactions across social media, particularly on X (formerly Twitter), where many traders expressed satisfaction over the loss.

“A scammer gets a dose of karma,” commented Onchain Lens in a post on the matter.

“Karma is real!” added another user on X.

In an unexpected turn, another user publicly shared the scammer’s full name, passport information, and even photos of their family members. This individual went as far as tagging major U.S. figures such as Donald Trump, Elon Musk, and the FBI in an attempt to draw attention to the situation.

Background on ZKasino

ZKasino emerged as a decentralized gambling platform built on the Ethereum-based layer-2 blockchain platform ZKsync. The platform was powered by its native token, ZKAS, and managed to attract around 75,000 followers on its official X account.

However, ZKasino faced significant backlash in April 2024 after users reported that their Ethereum deposits were never returned following initial signups. Many users claimed the platform was a scam, alleging that it absorbed ZKAS tokens without delivering the promised returns.

In response to these accusations, the ZKasino team assured users that refunds would be issued once the platform launched its mainnet. Despite the promise, the mainnet never materialized, and users ultimately lost over $30 million worth of Ethereum.

Additional Allegations Against ZKasino

The controversy surrounding ZKasino extended beyond user complaints. Kedar Iyer, founder of the ZKsync decentralized exchange (DEX) project ZigZag, publicly accused the ZKasino team of defrauding contractors and employees. Iyer claimed that several individuals who contributed to building the platform were never compensated for their work.

This series of events has left ZKasino with a tarnished reputation, and its association with the recent Ethereum liquidation further highlights the fallout from its alleged fraudulent activities.

Key Takeaways for Crypto Enthusiasts

For those interested in cryptocurrencies, investing, and blockchain-based platforms, this case serves as a cautionary tale about the risks involved in decentralized finance (DeFi) and blockchain gambling platforms. Here are some tips to safeguard your investments:

  • Always conduct thorough research before engaging with any blockchain-based service or platform.
  • Be cautious of platforms promising high returns without transparent operating mechanisms.
  • Monitor social media and community discussions for potential red flags about a project.
  • Use reputable wallets and exchanges with strong security measures.
  • Consider diversifying your investments to minimize risk.

The cryptocurrency industry continues to evolve, and while it offers significant opportunities, it also comes with risks. Staying informed and vigilant can help mitigate these risks as you navigate this space.

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