- Market makers and investors in the recently closed ZKX decentralized exchange claim they were taken by surprise when the closure was announced and that they were not given any prior notice.
- The creator of ZKX has defended himself against investor accusations of rug pulls, claiming that early notification could have broken the procedure.
According to their X postings, investors in the recently closed decentralized exchange ZKX, which ran on Starknet, were taken aback by the protocol’s shutdown.
In response to ZKX’s millions in venture capital funding and its recent token generation event, blockchain expert ZachXBT and others claimed the project might be a rug pull. Eduard Jubany Tur, the company’s founder, defended the shutdown, saying it just didn’t make financial sense to move forward.
Undoubtedly, the TGE failed to live up to expectations, and the losses that ensued have played a part in our current predicament. Tur said in his initial announcement post that the token’s value has been decreasing as significant holders have exercised their right to cash out. Tur stated in a Telegram announcement message that there would have been a security risk if the shutdown had been announced in advance since users may have taken money out of the order books and someone could have taken advantage of this to put all of the customers’ money at danger.
Even investors and at least one significant market maker were apparently taken by surprise by Tur’s announcement, as they were not informed in advance of the shutdown. As investors, we received no warning when ZKX closed. ArkStream Capital founding partner Ye Su wrote on X that the team claimed they ran out of money, wouldn’t give any financial or expenditure details, and wouldn’t talk to us. In a post of its own, HashKey Capital expressed similar worries to Su’s, claiming that ZKX had not provided the venture capital firm with its financial information or its future goals.
After repaying half of its initial loan of two million tokens and acquiring an additional two million tokens as part of its market-making activities since the token production event, Amber Group, which bills itself as an investor and market maker for ZKX, said that it now possesses three million ZKX tokens. CoinGecko statistics indicates that since the listing, the price of ZKX’s token has decreased by 93.6%.
We have been net buying ZKX tokens from the listing, even as prices have dropped, because of the lack of organic buying demand at launch and our dedication to ensure steady liquidity. This strategy is in line with our dedication to helping projects and the communities they serve, even if it means putting ourselves in danger to maintain stable market conditions, according to Amber Group.
Tur further on the circumstances surrounding ZKX’s shutdown in a follow-up statement that was published on August 1. For further background, let me say that we handled a number of investor refunds prior to TGE, including those from a few investors who have been rather active on social media this week. Before the token launch, we made every effort to allay the worries of investors who were uneasy about their exposure to the ZKX token. Tur wrote, in part, “All of this is documented.” Which specific investors received a refund is unknown.
Since there are risks and a chance of failure associated with entrepreneurship, open communication, accountability, and transparency are critical qualities for founders. HashKey Capital stated, “We hope that founders understand how important a strong reputation is to securing future financing.”
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
