In the fight against cryptocurrency fraud, a collaborative effort led by Binance’s Crime Compliance and Investigations team has resulted in the arrest of a suspect involved in the ZKasino online gambling scam. Through a combination of blockchain analysis and open-source intelligence (OSINT), Binance pinpointed the attacker and alerted law enforcement.
The suspect, a 26-year-old man, was apprehended by the Dutch Fiscal Information and Investigation Service (FIOD) on April 29. The arrest was the culmination of a series of events that started with the ZKasino platform which allegedly defrauded investors of at least $33 million in digital assets. The platform had promised investors a return of their funds within 30 days, a claim that was later found to be false based on the smart contract’s setup.
Authorities seized over 11.4 million euros ($12.2 million) in crypto, real estate, and luxury cars from the suspect. The arrest followed extensive on-chain forensic work by Binance’s team, who examined the smart contracts and transaction patterns associated with the scam.
The ZKasino scam is a classic example of a “rug pull” in the cryptocurrency and decentralized finance (DeFi) sectors, exploiting the trust and funds of investors through a blockchain-based gambling platform. Initially, ZKasino attracted significant attention and investment by promising high returns, claiming that investors would receive their funds back within 30 days. This assurance led to the collection of over 10,515 Ether from more than 10,000 investors.
Adding to the layers of deceit, ZKasino had also claimed to have secured a Series A funding round at a valuation of $350 million, with prominent backers including MEXC and Big Brain Holdings. These claims were later debunked by the supposed backers who clarified that they had not invested, indicating that ZKasino used fabricated endorsements to enhance its legitimacy and attract more investment.
The crypto community also played a part in exposing the scam. Crypto analysts, including FatMan, linked the suspect to the pseudonym “Derivatives Ape,” the alleged ZKasino builder. Additionally, past comments made by the suspect on social media raised red flags for some community members.
