The cryptocurrency space is in turmoil after a project called Gemholic allegedly vanished with $3.5 million in an apparent rug pull. The incident, which unfolded on the zkSync network, has left investors fuming and raised questions about the role of KYC providers in the crypto ecosystem.
Investors Cry Foul After Funds Disappear
Following an alleged year of false promises regarding refunds, the Gemholic project seems to have disappeared after regaining access to locked funds. NSerec, founder of Zkmarkets, took to X to expose the situation, claiming Gemholic stole $3.5 million from investors.
Adding fuel to the fire, NSerec revealed the Gemholic contract creator’s address was supposedly funded by Binance. This has led to calls within the community to hold Binance accountable and potentially aid in recovery efforts.
KYC Provider’s Silence Raises Concerns
Gemholic had reportedly completed KYC verification with SolidProof, a service designed to identify individuals and businesses involved in crypto projects. However, SolidProof’s silence on the matter has drawn sharp criticism.
NSerec believes this silence is a deliberate attempt to prevent panic within the investor community. He argues that SolidProof has two options: either admit to shortcomings in their verification process or report the suspected fraud to authorities and inform the public.
NSerec further warns that continued silence from SolidProof could erode trust in their services. He suggests the community may even resort to calling them “UselessProof” if they fail to address the situation.
A Technical Glitch Turned Sour
The backstory behind this alleged rug pull involves a technical error in the Gemholic project’s sales contract, which locked funds for over a year. zkSync, the Ethereum layer-2 scaling solution Gemholic operated on, finally fixed the issue with their v24 upgrade on June 7th. This allowed Gemholic to access the locked funds, but instead of fulfilling refund promises, they allegedly absconded with the money.
With the Gemholic project’s online presence seemingly wiped clean, the affected community is left scrambling for answers and potential recourse. This incident highlights the ever-present risk of scams within the cryptocurrency space and raises questions about the effectiveness of KYC providers. As investigations unfold, the industry will be watching closely to see if any action is taken against those allegedly involved and if SolidProof addresses the community’s concerns..
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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