The abrupt shutdown of ZKX has stirred significant concern within the cryptocurrency realm. This unexpected event has led Amber Group, a prominent asset management firm and market maker, to urge for greater transparency and accountability in crypto projects. On July 31, ZKX, a social derivatives trading platform on the Ethereum-based Starknet layer-2 network, ceased operations due to unviable economic prospects as stated by its founder, Eduard Jubany Tur.
In response to the surprising announcement on July 30, Amber Group articulated its shock and called for increased transparency. The firm’s involvement with ZKX was notable, as it acted as a market maker during the token generation event on June 19. To ensure steady market operations, Amber Group borrowed 2 million ZKX tokens under a standard loan agreement with no added fees. The primary strategy was to maintain consistent liquidity and a market-neutral stance.
Despite the initial lack of organic buying interest, Amber Group continued to purchase ZKX tokens to support liquidity, even as prices fell. However, on June 24, the ZKX team requested the return of 1 million tokens to decrease circulation and boost community confidence. Amber Group complied, reducing its token loan to 1 million tokens. In addition to this loan, Amber Group accumulated 2 million ZKX tokens from the open market through its liquidity provision efforts, bringing its total holdings to 3 million ZKX tokens.
The closure of ZKX has left many investors, including Hashkey Capital, frustrated. They have voiced their dissatisfaction with the lack of transparency and accountability from the protocol regarding its financial and operational decisions. Hashkey Capital emphasized that ZKX’s failure to provide timely and clear disclosures about its operations and management eroded trust among investors. Furthermore, the unresponsive communication from ZKX and Tur’s handling of the situation was deemed disappointing and regrettable.
This situation underscores the critical need for transparency and effective communication in the cryptocurrency industry. Investors and stakeholders demand accountability to maintain trust in crypto projects. The ZKX shutdown serves as a stark reminder of the potential consequences of inadequate transparency and poor communication, highlighting the importance of these elements in the sustainable growth of the cryptocurrency market.
