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ZKasino users are expressing their frustration as $33 million in Ethereum, initially promised for refunds, was unexpectedly transferred to the staking platform Lido. This move deviates sharply from the original agreement, stirring significant uproar among investors.
ZKasino Faces Backlash for Misusing $33M in ETH, Alters Refund Terms Amid Exit Scam Accusations
According to Cointelegraph, ZKasino, a blockchain-based gambling business, is being chastised on X for transferring $33 million in investor and user assets to the staking system Lido, a dramatic departure from its previous plan to return the cash.
ZKasino announced the launch of its network in a blog post dated April 20. extra than 10,000 users who had crossed a total of 10,515 Ether to the network to gather extra ZKasino (ZKAS) tokens expected to receive their ETH back as promised.
Instead, ZKasino's statement stated that it "made changes from our initial plan" and that all bridged ETH was converted to ZKAS at a "discounted rate of $0.055" over a 15-month vesting period.
It stated the changes were made "as a favor" to ensure a "smooth transition" because its chain does not employ ETH. Users also observed a change in the text on its website, which removed a line stating that the ETH "would be returned."
These worries were heightened following an on-chain transfer in which ZKasino transferred all of its customers' 10,515 ETH to the staking system Lido.
Meanwhile, an unknown crypto developer identified as "cygaar" argues that the blockchain ZKasino provided was "an Arbitrum Nitro chain that took 2 minutes to deploy" and did not use zero knowledge technology or EigenDA, as claimed.
On X, hundreds of posts from purported ZKasino users who contributed money to the project are now complaining that it is an exit scam.
Some have even distributed the personal name and address of ZKasino's founder, identified on X as "Derivatives Monke," to seek legal action.
Venture Firm Big Brain Denies ZKasino Investment Amid $350M Fundraising Scandal; MEXC Claims Victim Status
Big Brain, a venture capital firm, has now added to the scandal, alleging in an April 21 X post that ZKasino "appears to be fraudulent" and that it "never invested in ZKasino" but was given a pro-rata token distribution that it had not received and "will not opt to receive."
This occurred after ZKasino claimed in an X post last month that it had secured a Series A financing round worth $350 million, with backing from cryptocurrency exchange MEXC and venture firm Big Brain Holdings, among others.
Meanwhile, on April 21, crypto site TechFlow reported that MEXC stated (translated) that it was “just one of the investors” and ZKasino’s “behavior has nothing to do with us. As an investor, we are also victims.”
ZKasino, its creator, parent company ZigZag Labs, and MEXC did not immediately reply to requests for comment. ZKasino has remained relatively silent on X during the reaction. The project provided a mundane update regarding implementing EIP-3074 on X.
Derivatives Monke has responded to an X user who chastised him for ZKasino's recent decision, and in another post, he revealed his project's most recent X post, captioned "keep building."
Photo: Microsoft Bing
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