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Amid allegations of a rug pull scam, MEXC, a major crypto trading platform, has distanced itself from ZKasino after the betting site was accused of misappropriating funds and deceiving investors about its financial backing.
ZigZag Accuses ZKasino of Misusing Funds and Deceiving Users; Allegations Surface Amid Crypto Scams
In March, ZigZag, a decentralized P2P order book exchange, made various claims against ZKasino. Coingape reported that this claim is based on the alleged misappropriation of project development funding for personal purposes.
Furthermore, ZigZag claimed that the cryptocurrency betting platform misled players by lying about its funding. ZKasino was also responsible for paying several developers and contractors who worked on the platform, but it failed to do so.
“The initial money to build ZKasino was stolen from the ZigZag Treasury. The ZKasino founders are 3/5 signers on the ZigZag multisig so they were able to use the funds to fund their own activities…The $40 million ecosystem fund they announced isn’t real, and will likely never be paid out in any real currency,” ZigZag stated.
These allegations from ZigZag received less attention than expected until ZKasino users expressed concern over the platform's claimed withdrawal of an earlier agreement to restore the bridged Ethereum. Meanwhile, it is unclear whether this is a rug pull or FUD, as noted by ZKasino, but it is worth mentioning that scams are becoming increasingly common in the crypto world.
Other rug-pull instances have occurred recently, similar to ZKasino. Hong Kong authorities revised the number of individuals arrested concerning the JPEX Exchange rug grab from last year a few days ago. So far, up to 72 people, including JPEX executives, have been arrested.
Overall, users of cryptocurrency platforms should exercise caution and conduct due diligence before investing in such initiatives.
Investors Retreat from ZKasino Following Fraud Allegations, MEXC, and Big Brain Reassess Ties
Given the gravity of the allegations against ZKasino and the potential consequences for individuals involved with the platform, some of these companies began to withdraw from the site.
MEXC, a cryptocurrency trading platform that participated in ZKasino's Series A fundraising round at a $350 million value, informed the public that it was unaware of the rug pull.
In addition, MEXC stated that only one of ZKasino's investors has fallen prey to its techniques.
Another investor, Big Brain Holdings, claimed to have invested in the Zigzag Exchange project in 2022. The firm explained that its investment in Zigzag resulted in a financial loss. While Big Brain did not invest directly in ZKasino, the company recognized that the majority of the prior founders of the Zigzag project are now on the ZKasino team, which appears to be fraudulent.
Big Brain Holdings also stated that its sole direct participation with ZKasino was an offer of a pro-rata token distribution, which it has yet to receive. However, given the current circumstances, the firm has no plans to receive the token. More corporations are expected to officially disavow their commitment to ZKasino in the following days.
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