Amber Group Demands Transparency Amid ZKX Shutdown Controversy

The unceremonious shutdown of ZKX has sparked strong reactions from stakeholders within the cryptocurrency ecosystem. Asset management firm Amber Group leads the call for transparency and accountability following the suspension of operations by ZKX protocol on July 31.

Abrupt Closure of ZKX

Notably, ZKX, which operates on the Ethereum-based Starknet layer-2 network as a social derivatives platform, abruptly shut down. However, on July 30, ZKX founder, Eduard Jubany Tur announced the protocol would cease operations. Tur in the announcement stated that the protocol lacked a viable economic prospect for its continued operation.

Following the announcement, all markets were delisted from the platform and users’ funds returned to their trading positions. Additionally, traders were advised to transfer the funds to their main self-custodial accounts on the Starknet network.

Amber Group Responds

In a swift reaction on X, Amber Group expressed disappointment at the lack of prior notification or communication about their plans. Chiefly because ZKX has been alleged to have operated in bad faith. As per the asset management firm, as one of the market markers for ZKX for their TGE, Amber Group received a loan of two million ZKX tokens on June 19, with no extra fees charged.

As per the explanation, it required them to maintain consistent liquidity for ZKX and a market-neutral position. In a surprise move, the ZKX team requested return of one million ZKX tokens citing the need to bolster community confidence and the next communication received on July 30 had to do with the shutdown.

The Amber Group believes the move does not set a good precedent in the crypto industry and has demanded the ZKX team to take necessary steps to address the situation constructively.

Broader Investor Discontent

Meanwhile, other investors have expressed similar displeasure with the ZKX protocol. HashKey Capital maintains that ZKX’s failure to transparently reveal its plans and intentions has impacted investors’ confidence and trust. HashKey says it also did not get accountability from ZKX on its financial information, management decision and operational plans.

HashKey Capital also took a swipe at the ZKX team for their poor communication with investors, tagging it as disappointing. “Tur’s handling of the situation was regrettable,” it stated.