Gemholic, the team behind the GemSwap decentralized exchange on the Ethereum Layer 2 network ZkSync, faced rug pull accusations after locked funds were unlocked with the ZkSync network upgrade, and their social media assets appeared to have been deleted. In April 2023, The Block’s research director, Eden Au, was the first to notice that 921 ETH collected by Gemholic had been accidentally locked due to a technical difference between ZkSync’s Era network and the Ethereum mainnet.

ZkSync developers reported at that time that they had found a solution to unlock funds. These funds, which were worth approximately $1.7 million at the time, reached a value of $3.4 million with the increase in the Ethereum price. The funds appear to have opened yesterday after ZkSync recently implemented the v24 upgrade on its mainnet.

Gemholic had initially promised to continue the project once funds became available. Last April, the project wrote on the now inaccessible .”

However, after the funds were recovered, X users noticed that the funds had been moved to the Ethereum mainnet, and Gemholic’s X and Telegram accounts suddenly became inaccessible, presumably deleted by the Gemholic team. X user Nahnah64 compiled a list of wallet addresses reflecting $3.4 million in recently opened funds.

“Today, $3.5 million was stolen by Gemholic. They made false promises to their investors for a year and then pulled the rug when the funds opened,” wrote X user NSerec, founder of zkMarkets, on the X platform.

Gemholic had received know-your-consumer (KYC) and smart contract verification from blockchain security provider SolidProof, and the project was issued a certificate of compliance.

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The post Gemholic is on the Agenda with Rug Pull Allegations Following the Incident Last Year appeared first on Coin Engineer.

Unlocking of Funds and Immediate Disappearance

Due to a technical discrepancy between ZkSync’s Era network and Ethereum’s mainnet, Eden Au, director of research at The Block, was the first to observe in April 2023 that the 921 ETH raised by Gemholic had been inadvertently locked in its ZkSync smart contract.

At the time, ZkSync developers claimed to have figured out a way to access the about $1.7 million worth of cash, which had subsequently appreciated to $3.4 million in value with Ethereum’s surge in price. Yesterday, with the release of ZkSync’s most recent v24 upgrade on the mainnet, the money appeared unlocked.

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Originally, Gemholic had vowed to carry on the project once the money came free. “We know many people have lost trust, but we still think the @zksync crew can help restore things. Everybody should believe in us. We will start a pre-launch for the project and a marketing campaign right away once the contract is set.” The project also noted on its now-inaccesible X account in April: “We will also refund the overflow,” an archival version of the page notes.

Gemholic’s Vanishing Act

After the money was recovered, X users discovered that the cash had been transferred to the Ethereum mainnet while Gemholic’s X and Telegram accounts vanished, most likely after being deleted by the Gemholic crew. X user Nahnah64 created a list of wallet addresses, apparently reflecting the $3.4 million in recently discovered cash.

“Today, Gemholic, who for an entire year falsely promised refunds to its investors, only to execute a rug pull after the funds were finally unlocked, stole $3.5 million,” X user NSerec, founder of zkMarkets, posted on X.

Gemholic received a certificate of compliance after knowing-your-consumer (KYC) and smart contract validation from blockchain security company SolidProof. Press time did not allow SolidProof and ZkSync to be readily accessed for comments.

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