ZKX Announces Project Closure Amid Funding and Token Controversy

Blockchain investigator ZachXBT has reported that ZKX, a gamified social derivatives trading DEX on Starknet and Ethereum, raised millions in funding and launched its governance token, despite the risk of project closure.

On Tuesday, ZKX declared it would discontinue operations, delisting all markets, closing positions, and returning funds to users’ trading accounts. Founder Eduard Jubany Tur explained the decision was due to a lack of an economically viable path for the protocol, citing minimal user engagement and a token generation event that fell short of expectations as holders began to cash out the “undervalued” asset.

“The sunset period will last until the last day of August. ZKX vesting and distribution will continue after sunset on September 1. We strongly encourage everyone to withdraw their funds before sunset through August and claim any pending STRK rewards,” Tur stated.

ZKX Fundraising and Token Generation Event

ZKX raised $4.5 million in seed funding, announced in July 2022, with backing from investors such as Alameda Research, StarkWare, and HTX. Additional investment followed, bringing the total funding to $7.6 million to “accelerate the expansion” of the ZKX protocol.

The project’s ZKX governance and staking token was launched on KuCoin, Gate.io, and Bitget, coupled with an airdrop for community members. At the time, Tur remarked, “This milestone marks the beginning of a transformative year for ZKX and our users.”

Following the closure announcement, ZachXBT expressed dismay, questioning the timing of the fundraising announcement and the token generation event (TGE).

In response, Tur explained the funds had supported operational costs, including hiring and audits, and confirmed that user funds were returned, with over 80% of users self-custodying.

“Core founders didn’t sell a single token from their allocations and unfortunately have seen four years of work and their lives evaporated,” he said, acknowledging that previous strategic decisions could have been better.

ZKX ‘Rugpull’ Complaints

Complaints of a potential “rugpull” surfaced from other community members, suggesting the project misled users between the funding announcement and shutdown.

Tur defended the timeline, stating that pre-announcing closures would pose security risks. However, Bru Finance founder Ashish Anand commented that a burn rate of $2.5 million annually is “not a big sum in crypto,” suggesting the token sale may have been their last chance for fundraising.

ZachXBT reiterated that the team misled investors regarding the project’s health, stating that users are now victims of this incompetency.

As of now, ZKX is trading at $0.01, a decrease of 19% in the last 24 hours and down 74% over the past week, according to CoinGecko data.


ZKX and Eduard Jubany Tur did not immediately respond to inquiries for comment.

Note: Headline and content have been updated for clarity.