An account associated with the blockchain gambling project ZKasino, which was previously accused of defrauding users of over $30 million in 2024, suffered a major financial blow, losing approximately $27.1 million when a highly leveraged long Ethereum (ETH) position was forcibly liquidated on the trading platform Hyperliquid.
Blockchain transaction data indicated that the account had opened a 20-times leveraged ETH trade. When market conditions turned unfavorable, the trader was unable to meet the position’s maintenance requirements, causing a full liquidation of holdings totaling $27.1 million. The account nevertheless still showed roughly $147.38 in unrealized profits and losses after the incident.
This particular wallet was previously connected to a ZKasino scam that attracted widespread criticism last year after allegedly stealing about $32 million in ETH from users. Following the news of this liquidation, many traders and observers took to the social media platform X to voice their approval. Comments widely expressed the sentiment that justice had been served to the scammer.
Meanwhile, social media users became increasingly active, with one user revealing the alleged identity of the scammer, posting his name, passport photograph, and even images of relatives. The tweet also notably tagged prominent figures such as Donald Trump, Elon Musk, and official FBI accounts, in what appeared to be an attempt to alert authorities.
ZKasino originally positioned itself as a decentralized gambling platform built upon ZKsync, a Layer-2 scaling solution for Ethereum. It attracted attention partly through its native token, ZKAS, amassing around 75,000 followers on social media. However, controversy erupted in April 2024 when users began publicly reporting the platform was withholding their initial Ethereum deposits. Broader community backlash intensified as ZKasino never launched its promised mainnet, leading to a widespread loss of millions in user funds and persistent accusations of fraud.
Additionally, Kedar Iyer, founder of the decentralized exchange ZigZag, openly accused ZKasino management of further wrongdoing, alleging that they had defrauded former contractors and employees by failing to pay for their platform development services.
