On April 29, Dutch investigative agency — FIOD (Fiscale Inlichtingen- en Opsporingsdienst) arrested a 26-year-old man suspected of fraud, embezzlement, and money laundering in connection with the ZKasino online gambling platform.
The suspect’s detention, which was extended by 14 days for investigative purposes, is the first arrest in the ZKasino fraud case, where investors lost at least $33 million worth of digital assets.
FIOD stands for Fiscale Inlichtingen- en Opsporingsdienst, which translates to Fiscal Information and Investigation Service. It is a Dutch investigative agency responsible for combating financial crimes, including tax evasion, money laundering, and fraud.
During the investigation, authorities conducted a search of the suspect’s residence and confiscated digital storage devices. Assets totaling more than €11.4 million, including real estate, a luxury vehicle, and various cryptocurrencies, were seized.
The criminal inquiry commenced on April 25th following reports on social media platform X and intelligence provided by FIOD’s intelligence departments. ZKasino started as a gambling platform and blockchain casino which promised investors a return on their investments within 30 days.
However, the team did not fulfill the promises made, and instead pulled the rug. A rug pull in the crypto industry refers to a deceptive scam tactic where the developers of a cryptocurrency project suddenly abandon the project, taking all the invested funds with them.
This scam typically involves the creation of a new coin that promises high returns or unrealistic scenarios to attract investors. Once the coin is launched, the scammers promote it aggressively on social media platforms to entice investors to buy the cryptocurrency.
However, the fraud becomes evident when the project founders vanish without any notice, absconding with all the funds invested by individuals.
According to a Cyvers Alerts report, zkasino used investors’ funds to create their cryptocurrency, the $ZKAS token, through farming. Suddenly, on April 20, 2024, approximately 10,500 ETH, valued at $33 million at the time of transfer, was withdrawn from ZKasino.io’s account before fulfilling its commitments.
Moreover, all communication channels associated with ZKasino.io, such as Telegram and Discord, were deactivated, preventing users from accessing their funds. In response to the incident, the FIOD closely collaborated with Binance’s Financial Crime Compliance and Investigations Team, resulting in the seizure of millions of euros in cryptocurrencies.
Besides the arrest of a suspect, further apprehensions of team members are anticipated as the investigation progresses.
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