Person holding smartphone with logo of crypto services company Amber Global Limited in front of website. Source: Timon - stock.adobe.com

Key Takeaways:

ZKX, a social derivatives trading platform on Starknet, abruptly shut down on July 31, emphasizing the need for transparency in crypto projects.
Amber Group, a major supporter and market maker for ZKX, was taken by surprise by the closure, despite their efforts to support the platform.
Investors like Hashkey Capital criticized ZKX for its poor communication and financial disclosures, leading to diminished trust.

The unexpected closure of ZKX, a social derivatives trading platform on Starknet, has highlighted the necessity for transparency in cryptocurrency projects.

Amber Group, a key market maker and asset management firm, underscored this need after ZKX shut down on July 31 due to economic challenges.

In light of recent developments with ZKX, while we honor our contractual confidential obligations with our clients including ZKX, we’d like to share our perspective and necessary information as an investor and market maker to promote transparency and support the community. We… https://t.co/Erx038azsH
— Amber Group (@ambergroup_io) August 3, 2024

Amber Group, which supported ZKX’s market operations by receiving a 2 million ZKX token loan and maintaining liquidity, expressed surprise at the sudden closure.

Despite falling prices and low buying interest, Amber Group continued to support ZKX, returning 1 million tokens to reduce circulation and bolster confidence.

Important Statement 30.07.24

With much regret, we have to announce the discontinuation of the ZKX protocol. Despite our best efforts, we have been unable to find an economically viable path for the protocol.

(1) All markets have been delisted, positions have been closed and all…
— Eduard (@0xEduard) July 30, 2024

The firm accumulated a total of 3 million ZKX tokens.

Much like other investors, we experienced a lack of transparency and accountability from @zkxprotocol in disclosing their financials, allocation of funds and operational plans.

Additionally, their reluctance to communicate was disappointing, and the manner in which the founder… https://t.co/4EyaUdEp06
— HashKey Capital (@HashKey_Capital) August 2, 2024

Other investors, like Hashkey Capital, also voiced frustrations over ZKX’s lack of transparency and accountability, criticizing its poor communication and handling of financial disclosures, which eroded trust in the project.