Amber Group calls for transparency after ZKX shutdown

The recent shutdown of ZKX sent shockwaves through the cryptocurrency community, prompting asset management firm and market maker Amber Group to share its perspective, promote transparency and support the community. 

On July 31, the ZKX protocol, a social derivatives trading platform operating on the Ethereum-based Starknet layer-2 network, ceased operations. Its founder cited a lack of feasible economic prospects for the project’s continued existence.

In an X post, the Amber Group expressed  shock at the July 30 announcement from ZKX founder Eduard Jubany Tur that the protocol would be shut down.

Supporting ZKX’s market operations

The firm noted that it had been closely involved with ZKX as a market maker, facilitating liquidity during the token generation event on June 19.

To ensure smooth market operations, Amber Group received a 2 million ZKX (ZKX) tokens loan under a standard loan agreement with no additional fees. According to the firm, the strategy was to maintain consistent liquidity and a market-neutral position.

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Despite the lack of organic buying interest at its launch, Amber Group continued to buy ZKX tokens to uphold liquidity, even as prices declined. However, on June 24, the ZKX team requested the return of 1 million ZKX tokens to reduce circulation and bolster community confidence. Amber Group agreed, reducing its token loan to 1 million tokens.

Amber Group has also accumulated 2 million ZKX tokens from the open market due to its liquidity provision efforts, bringing its total holdings to 3 million ZKX tokens.

Investors vent frustration

Other investors, including Hashkey Capital, have expressed their disappointment and frustration with ZKX, stating that, like other investors, it did not receive sufficient transparency and accountability from the protocol regarding its financial information and operational plans and decisions.

According to Hashkey, ZKX’s failure to provide transparent and timely disclosures about its operations and management eroded trust and confidence in the project. Furthermore, ZKX’s unresponsive communication style was disappointing, and Tur’s handling of the situation was “regrettable,” it said.

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