ZkSNARKs NFT project accused of extracting $17M from investors with minimal utility

A 10,000-piece profile picture NFT collection built on the Zcash blockchain is facing serious allegations after on-chain investigator ZachXBT accused the project of raising approximately $17 million through a blind auction while delivering virtually no utility or ecosystem development.

The zkSNARKs NFT project, which borrows its name from the zero-knowledge proof technology underpinning Zcash’s privacy features, sold 8,000 NFTs at a uniform clearing price of 1.5 ZEC each. That works out to a mint fee of roughly $2,000 per NFT.

The auction numbers tell a story

The blind auction format attracted 16,971 bids for those 8,000 available NFTs. Total volume clocked in at approximately 25,305 ZEC, which translates to about $36.94 million at prevailing prices.

Unsuccessful bidders received refunds totaling around 13,309 ZEC, roughly $19.43 million. That leaves the project sitting on approximately $17.5 million in proceeds, a war chest that ZachXBT argues has no clear deployment plan.

The project’s structure adds another layer of concern. A 10% team allocation means the creators reserved 1,000 NFTs for themselves, free of charge, before the public sale even began. On top of that, a 5% royalty on secondary sales ensures the team continues to earn from every resale.

Privacy promises, transparency problems

The zkSNARKs project marketed its NFTs as privacy-enhancing digital identities. The pitch included potential applications in governance and community access, framing the collection as more than just another set of cartoon avatars. According to ZachXBT, none of these promised applications have materialized. No governance framework has been deployed. No community access tools have been built. No ecosystem partners have been announced.

ZachXBT’s investigation gained traction quickly on crypto-native platforms including Odaily and TechFlow, both of which picked up the story within hours of the auction’s conclusion on September 19, 2026.

Adding fuel to the fire, an NFT community figure known as Leonidas has alleged that members of the zkSNARKs team were previously involved in scams related to Ordinals projects. These claims remain unverified.

What this means for the NFT market

For Zcash specifically, the incident raises questions about whether the blockchain’s growing NFT ecosystem can develop trust mechanisms fast enough to prevent similar situations. Privacy is a feature, but when it extends to hiding a project team’s intentions and fund allocation, it becomes a liability for investor confidence.

ZachXBT has built a reputation as one of crypto’s most effective independent investigators, having previously traced funds from numerous scams and hacks across multiple blockchains. His involvement tends to accelerate community pressure on accused projects, though it does not guarantee any recovery of funds for affected buyers.

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