Binance Instrumental in Apprehension of ZKasino Scam Suspect

Binance, the largest cryptocurrency exchange globally, has played a crucial role in the arrest of a suspect involved in the ZKasino scam, following considerable public outcry and continuous movement of some stolen funds.

The Crime Compliance and Investigations team at Binance embarked on an investigation into the fraudulent gambling platform after it drew community ire. Employing a mix of on-chain data analysis and open-source intelligence (OSINT), the team meticulously traced the transactions and signatories associated with ZKasino’s smart contracts.

In discussing their investigative approach, a representative from Binance’s investigations team explained to Cointelegraph:
“We conducted a behavioral network study on all ZKasino smart contracts to identify the perpetrator and the signatories of the transactions.”

Following the identification of the suspect, Binance notified law enforcement, which led to the arrest of a 26-year-old individual by the Fiscal Information and Investigation Service (FIOD) on April 29. The authorities seized assets worth approximately 11.4 million euros ($12.2 million), including cryptocurrencies, real estate, and luxury vehicles.

This arrest is the first in the ZKasino case, where the platform deceitfully promised to return investments within 30 days, with Dutch authorities later revealing that the smart contracts indicated no intention to repay the investors.

Moreover, Binance managed to freeze millions in crypto assets related to the ZKasino scam after receiving a seizure warrant from law enforcement, although a significant portion of the illicit funds remains unaccounted for. Binance’s investigations team commented:
“Once we located the suspect’s account and received a seizure warrant, we could secure some of the funds. However, the majority of the ZKasino case still involves at-large elements.”

Additionally, the Binance team is assisting Dutch authorities with on-chain forensic analysis to track the fund flows and analyze the fraudulent contracts.

The ZKasino scam, categorized as a rug pull or exit scam, attracted investments totaling at least 10,515 Ether from over 10,000 individuals before the funds began being withdrawn surreptitiously by the scam operator.

Community involvement was pivotal in advancing the case, with key insights from crypto analysts and social media aiding in identifying the suspect. Notably, the suspect had previously expressed a bizarre interest in experiencing prison life, which was highlighted by Binance’s team.

Despite the suspect’s arrest, ongoing on-chain movements of the stolen funds indicate potential involvement of additional perpetrators, underscoring the complexity of the scam. Binance’s Investigations team is committed to continuing its collaboration with law enforcement to recover and return the stolen assets to the victims.