The cryptocurrency community is in deep disquiet following the alleged rug pulling incident.

The cryptocurrency community is abuzz following an alleged incident involving the Gemholic project and the zkSync network.

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

On Post Once the funds were finally released, the team carried out what looked like a rug pull. NSerec revealed that the contract generator address was funded by Binance and asked community members for ideas on how Binance can help contact them.

KYC provider silence

Although the Know Your Customer (KYC) verification process was carried out using SolidProof, the verification service has not publicly addressed the situation. NSerec believes that the silence could be an attempt to prevent the spread of fear, uncertainty and doubt (FUD) among investors.

Source: Swift Davey

According to NSerec, a KYC service provider must either admit that it did not do a good job of vetting the people involved or report the fraudsters to the authorities and tell the public what happened. If the KYC company, SolidProof, continues to ignore this issue, it means that their service should no longer be trusted.

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The founder of Zkmarkets said that if SolidProof does not handle the Gemholic scam, those involved should hold SolidProof responsible. He even suggested that if they don’t act, people should start calling them “UselessProof” instead of “SolidProof.”

Dramatic story

The zkSync Gemholic project funds have been closed for over a year due to an error in the sales contract. Matter Labs, the team behind Ethereum layer 2 scaling solution zkSync, identified the issue as stemming from the .transfer() function of the GemstoneIDO smart contract, which is part of a project managed by the GemholicECO ecosystem.

On June 7, zkSync completed the version 24 upgrade, fixing the issue and allowing access to blocked funds.

After the upgrade, the Gemholic project mined 921 Ether (ETH) from the nodes and moved them to the Ethereum blockchain. The Gemholic X account and all Telegram messages have also been deleted at the time of publication.

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