ZKasino scammer's risky Ethereum trade backfires with $27M loss amid market turmoil

The alleged scammer behind the ZKasino rug pull has reportedly lost over $27 million in a high-risk Ethereum trade as crypto market turbulence continues to catch overleveraged traders.

On April 7, blockchain analytics platform Onchain Lens revealed that the scammer had exited a 20x leveraged long position on ETH using the Hyperliquid trading platform.

The setback is believed to have stemmed from Ethereum’s recent price correction amid the broader market slump triggered by the US deciding to implement reciprocal tariffs on 180 countries.

According to CryptoSlate’s data, Ethereum fell almost 20% over the last 24 hours to as low as $1415 before attempting a recovery above $1500. ETH was trading at $1537 as of press time.

Many in the crypto space view the ZKasino scammer’s recent trading loss as a “dose of karma.”

The scammer’s loss echoes a case 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.

Zkasino scam

The funds used in the trade are believed to stem 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 move 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 press time.

Meanwhile, the Netherlands’ Fiscal Information and Investigation Service (FIOD) later arrested a 26-year-old man suspected of involvement in the scheme. Authorities seized digital assets, luxury cars, and real estate worth approximately $12.2 million.