ZKFair denies rug pull after $6 million bridge transfer raises alarm

Ethereum Layer-2 network ZKfair is at the center of a controversy after it moved $6 million out of its cross-chain bridge. The move sparked rugpull allegations, with stakeholders warning users to withdraw their funds from the bridge.

An X user, Weiweiyang, first spotted the suspicious transaction and referred to it as a rug pull. According to Weiwei, the team transferred all its cross-chain bridge assets to a private address, Ox4Ea1f0, which then staked most of the assets on the Aave protocol.

They wrote:

“If anyone has cross-chain assets to zkfair, please withdraw them immediately. The project team has rugged up. They have transferred all the cross-chain bridge assets to a private address, and all the assets are stored in aave.”

SlowMist founder Yu Jian, who was tagged in the initial post, also acknowledged that the transaction was suspicious. He noted that the funds were originally moved out of the ZKFair bridge to a Safe multisig address Oxcd14b, on March 27 before the eventual transfer to an externally owned account (EOA) address.

Interestingly, the EOA address is also one of the owners of the multisig wallets, which shows the transfer was by an insider and not a third-party exploit. Due to the lack of clarity around the transactions, L2Beat has also added a disclaimer to the project page, noting that funds have been moved and the bridge escrow upgraded to an unverified implementation.

L2Beat disclaimer about ZKFair (Source: L2Beat)

ZKFair is an L2 network based on Polygon CDK and Celestia DA. The Zero Knowledge rollup uses USDC for its gas token and positions itself as a decentralized community-backed project focused on transparency and fairness. It has been around since December 2023.

ZKFair denies rug pull; says it only upgraded cross-chain bridge

Meanwhile, the project has debunked the allegations of rug pull as false while explaining the reason for the transfer. In a post on X, its official account said the funds are safe, and its cross-chain bridge has been upgraded into a multi-signature bridge.

It claimed that the original bridge had limited Prover capacity, which affected user experience, so it moved the funds to a multisig.

It said:

“Previously, limited Prover capacity caused slow withdrawals and a suboptimal user experience. To improve efficiency and security, funds are now managed through a multisig setup.”

Interestingly, the project had posted about a bridge upgrade scheduled for March 27, 2025, telling users to avoid cross-chain operations at the time. It further confirmed that withdrawals are available through the ZKFair cross-chain bridge while adding the Etherscan of the bridge address 0xb10f60 that shows the bridge is holding $5.8 million worth of tokens, including USDC, USDT, ETH, Wrapped BTC, DAI, and ZKF.

ZKFair Bridge Contract contains $5.8 million (Source: Etherscan)

Meanwhile, the ZKFair token ZKF is down 14.64% in the last 24 hours, likely because of the rumors surrounding the suspicious transactions. Even without the rumors of rug pull, ZKF was already struggling with an 87.12% decline year-to-date and a 43.72% fall in 30 days, according to CoinMarketCap.

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