Dutch authorities arrest ZKasino team member amid rug pull allegations
Quick Take
- Dutch investigators searched the suspect’s home for physical and digital evidence, and seized assets worth over $12 million.
- The agency told The Block that the suspect is part of the ZKasino team.
- Investors have yet to reclaim over $33 million in ether bridged on ZKasino’s network.
Dutch financial crime investigators arrested a 26-year-old man on Monday for charges of fraud, embezzlement, and money laundering related to an alleged rug pull scheme behind the Web3 gambling network ZKasino.
Investigators searched the suspect’s home and seized physical and digital records, and various assets worth 11.4 million euros ($12.2 million) that include real estate and cryptocurrencies, the Fiscal Information and Investigation Service of the Netherlands (FIOD) said in a statement today.
The FIOD added that there is a possibility of more arrests related to ZKasino in the future. While the statement did not explicitly state how the suspect was involved with the project, the FIOD told The Block that he is part of the ZKasino team.
ZKasino, which set out as a decentralized gambling platform, abruptly changed its token redeeming policies around the time of launch. This change prevented investors from reclaiming their bridged ether tokens, which was initially promised by the team. By the time of launch, over 10,000 investors had already bridged more than $33 million worth of crypto on ZKasino, which led them to claim that the project was a rug pull scam.
The FIOD wrote in the statement that investors were told that they would get their investments back within 30 days, but that did not happen. The technical way in which the smart contract was set up on the blockchain also suggests that the return was not the intention, according to the authorities. “This could indicate a modus operandi called rug pull,” the FIOD added.
The statement detailed that the suspect was examined by a magistrate on Thursday, and that his detention was extended by two weeks.
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