Dutch authorities make arrest in connection to $30m crypto casino scam
Authorities in the Netherlands have announced they arrested a 26-year-old man in connection with an alleged crypto casino scam that has seen as much as $30 million lost by players.
Suspicions about ZKasino, which presented itself as a gambling platform and blockchain casino site, first arose last month via the social media site X, which used to be known as Twitter.
Players who signed up for accounts with the crypto casino were blocked from reclaiming their bridged ether tokens, having been told that they would get their investments back in 30 days. Instead, the site announced at short notice that it had swapped these for its own $ZKAS tokens. Those who bought $ZKAS tokens in the ZKasino pre-sale have not received their tokens either.
An investigation started on April 25 by the Fiscal Information and Investigation Service of the Netherlands (FIOD) after questions were raised saw property searched. Various physical and digital administration and digital data carriers were seized as a result. Authorities recovered 11.4 million euros in assets including various types of cryptocurrencies, a luxury car and real estate.
The FIOD suggested that the ZKasino crypto casino may have been designed as a “rug-pull” operation in which there was never any intention to return any crypto assets to account holders. More than 10,000 investors are believed to have been affected by the scam using the site. Some of them have set up a Telegram – ZKasino Legal Task Force – to discuss their options.
A statement released by the FIOD said authorities had worked with the crypto trading platform Binance’s financial crime compliance and investigations team on the ZKasino investigation.
“We managed to get in touch with those involved in this scam,” it said. “In order to return the millions invested to the victims, it is technically necessary that those involved in this scam cooperate. This has been expressly communicated to them. More arrests cannot be ruled out.”
In a post on its X account that linked to an online news story about the crypto casino scam, Binance said it was “proud to have supported Dutch authorities in the investigation of a gambling exit scam. Our Investigations team helped lead the recovery of millions of euros.”
The suspect, who has not been named by Dutch authorities yet, has already appeared in court. However, reports claim the man who was arrested is one of the founders of the ZKasino site. His detention was extended for a period of two weeks by court magistrates on May 2. ZKasino has not posted on its X account since April 24, the day before the FIOD investigation into the crypto casino site started. ZKasino’s co-founders have also been silent on social media.
The investigation into ZKasino shows the importance of crypto casino users ensuring they only use licensed, regulated and legit sites to play games like slots and blackjack using crypto. Decentralized blockchain-native fundraising group BlackDragon says it looked into investing in ZKasino but pulled out over due diligence when team members refused to reveal their identities.
