The crypto community is on edge after a suspected rug-pull incident involving the Gemholic project and the zkSync network has come to light.
Numerous users impacted by the alleged Gemholic scam have turned to social media to raise awareness. NSerec, the founder of Zkmarkets, has confirmed that Gemholic made off with $3.5 million.
In a social media post, NSerec revealed that Gemholic had been deceiving investors for a year by making false promises of refunds. Once the funds were finally accessible, the team executed what appeared to be a rug pull. NSerec also mentioned that the address of the contract creator was allegedly funded by Binance, and called on community members with knowledge on how to reach out to Binance for assistance.
Despite completing Know Your Customer (KYC) verification with SolidProof, the verification service has remained silent on the matter. NSerec suspects that this silence is an attempt to prevent fear, uncertainty, and doubt (FUD) from spreading among investors.
According to NSerec, a KYC provider should either admit their failure to properly vet the individuals involved, or report the fraudsters to the authorities and inform the public about the incident. If SolidProof continues to ignore the issue, their service cannot be trusted.
In related news, StarkWare has launched a $1M research fund for ZK Bitcoin scaling.
The zkSync project Gemholic experienced a year-long lock on its funds due to an error in the sales contract. Matter Labs, the team behind Ethereum layer-2 scaling solution zkSync, identified the problem with the .transfer() function in the GemstoneIDO smart contract, part of the GemholicECO ecosystem project.
On June 7th, zkSync completed its v24 upgrade, resolving the issue and allowing access to the locked funds. Following the upgrade, the Gemholic project withdrew 921 Ether (ETH) from the contract and moved it to the Ethereum blockchain. At the time of publication, Gemholic’s social media account and all Telegram messages had been deleted.
Looking ahead, zero-knowledge proofs show promise beyond crypto, from voting to finance.