Web3 is Going Just Great

Shkreli attempted to frontrun the news in a Twitter space, and came out with his own claims that he had collaborated with Barron Trump to create the token, and with Andrew Tate to pump its price. However, fellow felon and memecoin pumper Roger Stone subsequently crawled out of the woodwork to claim that neither Barron nor Donald Trump was involved with $DJT.

Shkreli has yet to provide solid proof that he created the memecoin, though zachxbt's research tends to be very strong. If true, Shkreli faces potential legal repercussions, as he is still on parole after his release in 2022. The terms of his parole require him to "refrain from engaging in self-employment which involves access to client's assets, investments, or money, or solicitation of assets, investments, or money", and to make financial disclosures to the courts. Shkreli was also banned from the securities industry in 2018, as part of a settlement with the SEC.

First, the team sniped their own $CAT token launch to obtain 63% of the token supply, ultimately selling a portion of it for around $5 million. Then, they took out $2.3 million and $1 million long positions on the ORDI and ETHFI tokens, respectively. Finally, they posted from the compromised influencer account to shill the ORDI and ETHFI tokens to his massive following. Ultimately, their gambit doesn't appear to have been incredibly successful: they made around $34,000 on the ORDI position, but lost $3,500 on the ETHFI position. However, as zachxbt noted, it's possible they also opened positions on centralized exchanges where the outcomes aren't publicly visible.

Instead, the project's creators transferred those more than 10,500 ETH ($33 million) to Lido, an Ethereum staking service. As for the "return" of funds, the project team indeed followed through with their promises to return the crypto... except instead of ETH, depositors received the project's native token, ZKAS, which would vest over a period of 15 months. The project announced that they had calculated the ZKAS distribution based on a discounted rate, "as a favour to our users who have bridged to participate in the ecosystem". Gee, thanks!

One investor in the project wrote, "We made a mistake investing in Zkasino early. ... [I]t sounds like a scam, but 95% of crypto consists of such crap. With memecoins pumping every day, people believe this could be the next one."

It seems that ZKasino's creators have links to other crypto scams, including a failed "ZigZagExchange", which raised around $15 million that was allegedly misallocated to work on the ZKasino project. Crypto sleuth zachxbt had also described the team as "proven bad actors" in December, listing multiple instances in which they had avoided making promised payments.

After the rug pull, the project's planned IDO on Ape Terminal and AIT Launchpad were canceled, and MEXC (which had invested in the project's seed round) canceled the token listing.

After the thief was identified by blockchain sleuth zachxbt, they posted a long message on Twitter, writing, "im not sorry for any of you, tbh. you are all morons if you believe all it needs to make it here is to send your money to a custodial address and get rich". The thief later spent some of the money on Milady NFTs and memecoins.

zachxbt stated that he had identified the developer, including his full name, location, and other details. He encouraged those who were scammed to contact him if they were interested in pursuing legal action.

Blockchain sleuth zachxbt was able to coordinate with the project to organize a community governance vote to burn the stolen tokens before the attacker was able to cash out. Although this doesn't return the stolen funds to their original owner, it at least keeps the attacker from profiting.