How Binance played a key role in arrest of ZKasino scam suspect
The on-chain investigations team behind Binance, the world’s largest cryptocurrency exchange, played a key role in leading law enforcement to the arrest of the Zkasino scam suspect.
Widespread community outrage first prompted Binance’s Crime Compliance and Investigations team to inquire into the fraudulent gambling platform.
The researchers used a combination of on-chain tracking and open-source intelligence information (OSINT) methods to find the attacker, and the Binance investigations team told Cointelegraph in an exclusive:
“We’ve looked into all the smart contracts for ZKasino, in a type of behavioral network study, to find out who was behind the contract, but also who were the signers behind those addresses.”
After identifying the suspect behind the smart contracts, Binance alerted law enforcement to the identity of the account holder who committed the fraud.
This led the Fiscal Information and Investigation Service (FIOD) to arrest the 26-year-old suspect on April 29, seizing over 11.4 million euros ($12.2 million) worth of crypto, real estate and luxury cars, according to a May 3 report by theFIOD.
This marks the first arrest in the ZKasino fraud case, where investors lost at least $33 million of digital assets. The platform initially promised users their investment back within 30 days. However, according to Dutch authorities, the smart contract suggests that the platform never intended to return the funds.
Binance successfully froze millions of dollars worth of the crypto stolen through the ZKasino rug pull after law enforcement issued a warrant against the accounts of the attacker. Binance’s investigations team said:
Together with law enforcement, we located the account of one of the suspects. We could act on that as they sent us a seizure warrant… so that way they were able to recover funds. But the main part of this ZKasino case is still at large.
The Binance investigations team has further assisted Dutch authorities with on-chain forensics, helping identify the flow of funds and understanding the way the malicious ZKasino smart contracts were set up.
The Zkasino rug pull, also known as an exit scam, attracted at least 10,515 Ether (ETH) from over 10,000 investors before the smart contract deployer started quietly siphoning out user funds.
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Crypto community played an important role in ZKasino arrest
Binance’s investigation team noted that the community played a significant role in the arrest of the ZKasino suspect and in revealing his identity.
Crypto investors, including popular crypto analyst FatMan, have suspected that the scammer behind the rug pull was pseudonymous ZKasino builder Derivatives Ape, which Binance also confirmed to Cointelegraph.
Some of the suspect’s previous comments on X have significantly helped the community identify the scammer, according to Binance’s investigations team:
Some of the comments that this person made with his moniker on Twitter, retrospectively, are a bit weird… [expressing] his wish to experience jail time for one to two years just for the experience.
Despite the arrest, the funds have continued moving on-chain, suggesting that multiple other attackers were involved with the rug pull.
Binance’s Investigations team will continue its close collaboration with authorities to ensure that the stolen funds are returned to investors.
