ZKX’s unexpected shutdown has sent ripples through the cryptocurrency community, prompting Amber Group to provide insights and critical information to support the community. On July 30, ZKX announced its cessation of operations, a revelation that stunned both Amber Group and crypto enthusiasts alike.
Amber Group Faces ZKX Shock
Amber Group disclosed its close involvement with ZKX during the token generation event (TGE) on June 19, where it played a key role as a market maker by ensuring liquidity. The company had received a loan of 2 million ZKX tokens at no extra cost, aiming to maintain market stability and support project longevity. Despite initial low organic purchasing interest, Amber Group continued to purchase ZKX tokens to sustain liquidity even as prices fell.
On June 24, ZKX requested the return of 1 million tokens to reduce circulation and boost community confidence, which Amber Group complied with, thus reducing the token loan to 1 million tokens. However, Amber Group had already accumulated 2 million ZKX tokens from the open market, bringing its total assets to 3 million ZKX tokens, including the 1 million tokens on loan.
Details on the Matter
Hashkey Capital and other investors expressed significant dissatisfaction with ZKX Protocol, citing inadequate transparency and accountability concerning financial information, operational plans, and decisions. Hashkey Capital emphasized that ZKX’s failure to provide timely and clear disclosures undermined trust in the project. The communication style of ZKX and the founder’s management of the situation were also criticized.
On July 31, the ZKX Protocol, a social futures trading platform on the Ethereum-based Starknet network, ceased operations. The founder attributed this decision to the absence of sustainable economic prospects for the project’s continuation.
Critical Insights
- ZKX’s shutdown came as a major shock to both the cryptocurrency community and Amber Group.
- Amber Group played a significant role in providing liquidity during ZKX’s token generation event.
- Hashkey Capital strongly criticized ZKX Protocol for its lack of transparency and accountability to investors.
In conclusion, Amber Group’s involvement with ZKX and the subsequent fallout highlight the critical need for transparency and clear communication in cryptocurrency projects. The event underscores the importance of robust market-making strategies and investor relations in maintaining trust and stability within the crypto community.