Zkfair refuses to pull rug after a $6 million bridge lifts alarm

Ethereum Layer-2 network Zkfair is at the heart of the controversy after moving $6 million from the cross-chain bridge. The move sparked a Ragpal allegation, with stakeholders warning users to withdraw funds from the bridge.

X user Weiweiyang first spotted a suspicious transaction and called it a lagpur. According to Weiwei, the team transferred all cross-chain bridge assets to its private address, Ox4EA1F0, betting most of the assets in the Aave protocol.

They wrote:

“If anyone has cross-chain assets in ZKFAIR, pull them out immediately. The project team is sturdy. They forward all cross-chain bridge assets to a private address, and all assets are stored in Aave.”

Slomast founder Yu Jian was tagged in the first post but also admitted that the deal was questionable. He noted that the funds were originally moved from the ZKFAIR bridge to the secure multisig address OXCD14B on March 27, prior to transfer to an externally owned account (EOA) address.

Interestingly, the EOA address is also one of the owners of the Multisig wallet. This indicates that the transfer is by an insider and not a third-party exploit. Due to the lack of clarity regarding transactions, L2Beat adds a disclaimer to the project page, noting that funds have been moved and Bridge Escrow has been upgraded to an unverified implementation.

l2beat disclaimer for zkfair (source: l2beat)

Zkfair is an L2 network based on polygon CDK and Celestia DA. Zero Knowledge Rollup is positioned as a decentralized community support project focusing on transparency and equity, using USDC for gas tokens. It has been around since December 2023.

Zkfair denies pulling the rug. They say they upgraded only the cross chain bridge

Meanwhile, the project forged the Ragpur allegations as false, explaining the reasons for the transfer. In X’s post, its official account stated that the funds were secure and that its cross-chain bridge was upgraded to a multi-signature bridge.

The original bridge claimed that it moved funds to Multisig because it had limited prober capacity that affected the user experience.

It said:

“Previously limited prober capacity caused slow departures and optimal user experience. Funds are managed through multi-sig setups to improve efficiency and security.”

Interestingly, the project posted about the bridge upgrade scheduled for March 27, 2025, instructing users to avoid cross-chain operations at the time. Additionally, it has been confirmed that drawers are available through the ZKFAIR cross-chain bridge, but it adds an EtherScan with bridge address 0xB10F60 to hold $5.8 million worth of tokens including USDC, USDT, ETH, Lapped BTC, DAI and ZKF.

ZKFAIR Bridge agreement includes $5.8 million (source: Etherscan)

Meanwhile, the ZKFAIR token ZKF has dropped by 14.64% over the past 24 hours. This is due to rumors surrounding a suspicious transaction. According to CoinMarketCap, ZKF has fallen 87.12% since the start of the year, with 43.72% falling 43.72% in 30 days, even without rumours of Ragpur.