Gemholic accused of rug pull after moving $3.3 million in recently recovered funds, vanishing from social media

Gemholic, the team behind the defunct GemSwap decentralized exchange on Ethereum Layer 2 network ZkSync, is facing rug pull accusations after moving previously-inaccessible funds recently unlocked by a ZkSync network upgrade and seemingly deleting its social media presence. 

In April 2023, Eden Au, director of research at The Block, was the first to notice that the 921 eth raised by Gemholic had been accidentally locked in its ZkSync smart contract due to a technical difference between ZkSync's Era network and Ethereum's mainnet. 

ZkSync developers reported at the time that they had devised a solution to unlock the funds, which were worth about $1.7 million at the time but have since grown to $3.4 million in value with ether's rise in price. The funds were seemingly unlocked yesterday following the deployment of ZkSync's recent v24 upgrade on its mainnet. 

Gemholic had originally promised to continue the project once the funds were unlocked. "We understand that many people have lost faith, but we still believe that the @zksync team can make things right. We need everyone to trust us. As soon as the contract is fixed, we will launch a marketing campaign and a pre-launch for the project. We will also refund the overflow," the project wrote on its now-inaccesible X account last April, according to an archived version of the page. 

However, following the recovery of the funds, X users noticed that the funds had been moved to the Ethereum mainnet while Gemholic's X and Telegram accounts were suddenly inaccessible, possibly after being deleted by the Gemholic team. X user Nahnah64 compiled a list of wallet addresses that seemingly reflect the $3.4 million in recently unlocked funds. 

"Today, $3.5 million was stolen by Gemholic, who for an entire year falsely promised refunds to its investors, only to execute a rug pull after the funds were finaly unlocked," X user NSerec, founder of zkMarkets, wrote on X . 

Gemholic had undergone know-your-consumer (KYC) and smart contract verification from blockchain security provider SolidProof , which awarded the project its certificate of compliance. SolidProof and ZkSync were unable to be immediately reached for comment by press time.