The abrupt shutdown of ZKX, a social derivatives trading platform on the Starknet layer-2 network, has sparked significant outrage among investors and market makers. The announcement, made on July 30 by founder Eduard Jubany Tur, cited economic infeasibility as the primary reason for the closure. However, the sudden nature and lack of prior communication have left many stakeholders feeling blindsided and frustrated.
Amber Group’s Shock and Response
Amber Group, a crucial market maker for ZKX, was particularly taken aback by the abrupt cessation of the platform’s operations. Expressing their discontent on X, Amber Group criticized ZKX for the poor communication surrounding the shutdown. Amber revealed that they had been actively involved in maintaining liquidity for ZKX’s token generation event on June 19, receiving a loan of 2 million ZKX tokens without additional fees.
Despite declining prices and low buying interest, Amber continued to purchase ZKX tokens to sustain liquidity. On June 24, ZKX requested the return of 1 million tokens to reduce circulation and boost community confidence, which Amber complied with. By the time ZKX announced its shutdown, Amber had accumulated 3 million ZKX tokens. In their post, Amber stressed the importance of transparency.
HashKey Capital and Other Investors’ Concerns
HashKey Capital joined Amber Group in criticizing ZKX for its lack of transparency. They voiced their dissatisfaction with ZKX’s failure to provide clear financial details and operational plans. Investor Ye Su also expressed frustration over the lack of advance notice before the shutdown. Blockchain investigator ZachXBT further fueled the controversy by suggesting that the shutdown resembled a rug pull.
Defense and Clarifications from ZKX
Henri, the director of developer relations at the Starknet Foundation, defended ZKX, arguing that the team had made significant contributions and that the closure resulted from poor decision-making rather than ill intent.
Founder Eduard Jubany Tur addressed the allegations in a detailed X post. He clarified that all user funds had been returned, with more than 95% of withdrawals completed. Tur acknowledged that the ZKX team underestimated operational costs, which significantly exceeded revenue. He explained that their $7.6 million fundraising over four years was insufficient to sustain operations.
Tur highlighted challenges during the token-generating event, including low demand and significant selling pressure. He emphasized that the team acted in good faith, attempting to balance stakeholders’ interests while exploring alternatives to sustain the project.
Moving Forward
The sudden shutdown of ZKX has significantly impacted the Starknet ecosystem and raised important questions about transparency and communication within the crypto community. As stakeholders voice their concerns, the industry watches closely to see how similar situations might be handled in the future.
