ZkSync’s Gemholic project suspected $3.5M rug pull


The cryptocurrency community is buzzing with concerns following a suspected rug pull incident involving the Gemholic project and the zkSync network. 

Several users affected by the alleged Gemholic scam have taken to the X social platform to raise awareness. NSerec, the founder of Zkmarkets, confirmed that Gemholic stole $3.5 million.

In the X post, NSerec claimed that Gemholic had deceived its investors for a year by falsely promising refunds. Once the funds were finally unlocked, the team executed what appeared to be a rug pull. NSerec revealed that the address of the contract creator was supposedly funded by Binance and asked community members who have insights on how Binance might assist, to reach out to them.

KYC provider silence

Despite completing a Know Your Customer (KYC) verification with SolidProof, the verification service has not publicly addressed the situation. NSerec believes that the silence is possibly an effort to prevent fear, uncertainty, and doubt (FUD) from spreading among the investors.

Source: Swift Defi

According to NSerec, a KYC provider must either admit that they didn’t do a good job checking the people involved or they should report the fraudsters to the authorities and tell the public what happened. If the KYC company, SolidProof, keeps ignoring this problem, it means their service shouldn’t be trusted anymore.

Related: StarkWare launches $1M research fund for ZK Bitcoin scaling

The Zkmarkets founder said that if SolidProof doesn’t deal with the Gemholic scam, the people affected should hold SolidProof responsible. He even suggested that if they don’t take action, people should start calling them “UselessProof” instead of “SolidProof.”


The zkSync project Gemholic had its funds locked for over a year because of a mistake in the sales contract. Matter Labs, the team behind Ethereum layer 2 scaling solution zkSync, identified the issue as stemming from the .transfer() function in the GemstoneIDO smart contract, which is part of a project run by the GemholicECO ecosystem.

On June 7, zkSync completed the v24 upgrade, which fixed the issue and allowed the locked funds to be accessed.

Following the upgrade, the Gemholic project withdrew 921 Ether (ETH) from the contract and transferred it to the Ethereum blockchain. Gemholic’s X account and all Telegram messages had also been deleted at the time of publication.

Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance