- Dutch authorities arrest suspects in alleged $30M crypto scam on Zkasino platform
- The ZKasino platform is said to have promised high returns but was designed to fail.
- The FIOD seized €11.4M in crypto, real estate & a luxury car linked to the suspect.
Dutch authorities, the Fiscal Information and Investigation Service (FIOD) has cracked down on a large-scale online gambling platform scam on April 29th, 2024. They arrested a 26-year-old man suspected of fraud, embezzlement and money laundering in connection with ZKasino which is the platform at the center of the investigation.
The investigation revealed a concerning pattern. Over $30 million USD in cryptocurrency had been invested by victims worldwide on ZKasino. The platform allegedly promised high returns within a short timeframe of 30 days.
However, a technical analysis of the platform’s smart contract – the self-executing code governing its operations – revealed a crucial detail. The contract was deliberately designed in a way that made it impossible to deliver the promised returns. This strongly suggests a “rug pull” scheme, a notorious crypto scam tactic where developers vanish with investor funds after raising capital through a project.
FIOD officials swiftly took action. A search warrant was executed, leading to the seizure of digital evidence as well as over €11.4 million worth of assets. This included real estate likely purchased with stolen funds and a luxury car that could be used by the suspect. Mulitple cryptocurrencies are believed to be linked to the scam. To ensure a thorough investigation, the suspect’s detention was extended by a court order.
The investigation itself was initiated based on reports on social media platform X (formerly known as Twitter) and intelligence gathered by FIOD’s own departments. Recognizing the evolving nature of financial crime, FIOD collaborated with cryptocurrency exchange Binance. This collaboration proved crucial, as it helped secure millions of euros in stolen cryptocurrencies before they could be further dispersed or laundered.
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