Wallet Linked to ZKasino Scam Loses $27.1 Million After 20x ETH Long Gets Liquidated

In a somewhat ironic turn of events, a wallet linked to ZKasino — a project that stole about $33 million in user deposits last year — lost $27.1 million after its ETH position got liquidated on decentralized exchange (DEX) Hyperliquid, according to an X post today, April 7, from blockchain data platform Onchain Lens.

Onchain Lens reported that the scammer lost $27.1 million after closing its ETH 20x long position on the popular DEX.

This loss was evidently due to the decline in ETH prices — alongside the broader markets — following President Trump’s reciprocal tariff announcement last week. According to CoinGecko data, Ethereum is down over 4% over the past 24 hours, and almost 15% on the week.

ZKasino saga

As The Defiant reported at the time, following its launch in April 2024, ZKasino attracted 10,515 ETH in user funds — about $33 million at the time, but about $16.6 million at current prices — after promising users an airdrop for bridging ETH to its platform. However, users never got an airdrop or a refund of their deposits.

Instead, the ZKasino team transferred the entire loot to staking protocol Lido Finance in order to earn yield on the stolen user funds, according to data from Ethereum blockchain explorer, Etherscan.

In May of last year, the Netherlands’ financial crime investigation agency FIOD revealed that it had arrested an individual that the agency suspected of being involved in the ZKasino scam, seizing over 11 million euro in the process.

Later that month, following ongoing online backlash, ZKasino announced in a blog post that it would set up a reverse bridging procedure to allow users to bridge back their ETH. At the time of writing, it still hasn’t done so.

Meanwhile, today, prominent onchain sleuth ZachXBT left a scathing comment on an X post by a user known as Derivatives Monke, revealing the identity behind the X account as Elham Nourzai, and claiming that he is both the key figure behind ZKasino and the individual arrested in the Netherlands last May:

“Your team stole $30M of investor funds from Zkasino and you were arrested. After those millions were gambled away via Hyperliquid/GMX leveraged positions and laundered the via instant exchanges and crypto to cash OTCs over the past few months. Elham Nourzai if there was a tier list for CT scammers you would be at the top.”

Previous reports have also linked Elham Nourzai to both the pseudonymous account Derivatives Monke and the ZKasino project.