Dutch authorities have arrested a 26-year-old man implicated in an alleged rug pull scheme involving the Web3 gambling platform ZKasino.
The arrest occurred on Monday, and it was part of an ongoing investigation into charges of fraud, embezzlement, and money laundering, according to the Fiscal Information and Investigation Service of the Netherlands (FIOD).
As part of the operation, law enforcement carried out a search of the suspect’s residence, seizing both physical and digital records, as well as assets amounting to approximately 11.4 million euros ($12.2 million). These assets comprised real estate holdings and a range of cryptocurrencies.
The FIOD indicated the possibility of further arrests as the investigation progresses. While specifics of the suspect’s role within ZKasino were not disclosed in the initial statement, officials later clarified that he was a member of the ZKasino team.
ZKasino was initially promoted as a decentralized gambling network. However, allegations arose when the platform altered its token redemption policies at the time of its launch, effectively blocking investors from reclaiming their bridged ether tokens—a reversal from what was initially promised. This sudden policy change affected over 10,000 investors who had collectively bridged more than $33 million into the platform, leading to widespread accusations that ZKasino was conducting a rug pull scam.
The FIOD’s statement elaborated that investors were initially assured they could retrieve their investments within 30 days. However, the setup of the smart contract on the blockchain indicated that returning the funds was never intended, a typical indicator of a rug pull scheme.
Following his arrest, the suspect was presented before a magistrate on Thursday, where his detention was extended by an additional two weeks as investigations continue.
The Netherlands, a member of the European Union, is part of a trading bloc that recently passed the Markets in Crypto Asset (MiCA) legislation. This EU-wide regulation allows companies to obtain a single license in one EU country and then operate across the entire union.
