ZKasino Scammer Loses $27M in Ethereum Trade Amid Market Turbulence

The alleged scammer behind the ZKasino rug pull has reportedly incurred a significant loss of over $27 million in a high-risk Ethereum trade. This incident occurred as the crypto market continued to experience turbulence, catching many overleveraged traders off guard. On April 7, blockchain analytics platform Onchain Lens revealed that the scammer had exited a 20x leveraged long position on Ethereum (ETH) using the Hyperliquid trading platform. The setback is believed to have been triggered by Ethereum’s recent price correction, which was part of a broader market slump. This slump was initiated by the U.S. decision to implement reciprocal tariffs on 180 countries.

According to the data, Ethereum fell almost 20% over the last 24 hours, reaching as low as $1415 before attempting a recovery above $1500. At the time of the report, ETH was trading at $1537. Many in the crypto community view the ZKasino scammer’s recent trading loss as a form of retribution, or "karma," for their previous actions. This loss echoes a similar incident from March 31, when the hacker behind the $9.6 million ZkLend exploit lost 2,930 ETH to a phishing site mimicking Tornado Cash. That individual had also ignored a bounty offer from ZkLend.

The funds used in the trade are believed to have originated from an earlier exploit tied to ZKasino, which occurred in 2024. The platform faced widespread backlash after executing a rug pull that drained nearly $33 million worth of Ethereum from users. ZKasino’s actions triggered intense criticism across the industry. Ethereum co-founder Vitalik Buterin criticized the project, claiming its use of “ZK” branding was misleading and solely based on its deployment on zkSync. In response to the backlash, ZKasino promised to refund investors’ funds while claiming it acted in users’ interests by converting the ETH to ZKAS tokens and locking them under a 15-month vesting schedule. However, the promised refunds have not materialized as of the report.

Meanwhile, authorities in the Netherlands arrested a 26-year-old man suspected of involvement in the scheme. The Fiscal Information and Investigation Service (FIOD) seized digital assets, luxury cars, and real estate worth approximately $12.2 million. This arrest and seizure of assets highlight the ongoing efforts by law enforcement to combat financial crimes in the crypto space. The ZKasino incident serves as a stark reminder of the risks associated with high-leverage trading and the potential consequences of engaging in fraudulent activities within the crypto market.