How Binance Played a Key Role in Arresting ZKasino Fraud Suspects
The on-chain investigation team of Binance, the world’s largest cryptocurrency exchange, played a key role in helping law enforcement apprehend Zkasino fraud suspects.
Widespread community outrage first led Binance’s Criminal Compliance (FCC) and investigations team to investigate the fraudulent gambling platform.
Researchers used a combination of on-chain tracking and open source intelligence information (OSINT) methods to find the attackers, the Binance investigation team told Cointelegraph:
“We looked at all the smart contracts on ZKasino in a kind of behavioral network study to find out who was behind the contracts and who signed behind those addresses.”
After identifying the suspects behind the smart contract, Binance notified law enforcement agencies of the identity of the account holder who committed the fraud.
This led the Financial Intelligence Unit (FIOD) to arrest the 26-year-old suspect on April 29 and seize 11.4 million euros ($12.2 million) worth of cryptocurrency, real estate and luxury cars, according to a May 3 report. FIOD.
This is the first arrest in the ZKasino fraud case, which saw investors lose at least $33 million in digital assets. The platform initially promised users that they would return their investment within 30 days. But according to Dutch authorities, the smart contract suggests the platform never intended to return the funds.
Binance successfully froze millions of dollars worth of cryptocurrency stolen through the ZKasino rug pull after law enforcement agencies issued warrants for the attackers’ accounts. The Binance research team said:
We worked with law enforcement to locate the account of one of the suspects. When they sent us the seizure warrant, we were able to act on it. That way they were able to recover their funds. But the main part of this ZKasino case is still far-reaching.
The Binance investigation team assisted Dutch authorities with on-chain forensics to identify fund flows and help understand how the malicious ZKasino smart contract was set up.
The Zkasino rug pool, also known as an exit scam, raised at least 10,515 Ether (ETH) from over 10,000 investors before smart contract distributors began quietly draining user funds.
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The cryptocurrency community played a major role in the arrest of ZKasino.
The Binance investigation team noted that the community played a key role in arresting suspect ZKasino and uncovering his identity.
Crypto investors, including renowned cryptocurrency analyst FatMan, suspected that the fraudster behind this was Derivatives Ape, an anonymous ZKasino builder, which Binance also confirmed to Cointelegraph.
According to the Binance investigation team, some of the suspect’s previous comments on X greatly helped the community identify the scammer.
Looking back, some of the comments this person left on Twitter under his own name are a bit strange… He was expressing his desire to spend 1-2 years in prison just for that experience.
Despite the arrests, funds continued to move on-chain, suggesting that several other attackers were involved in lug pulling.
Binance’s investigation team will continue to work closely with authorities to ensure that stolen funds are returned to investors.
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