Blockchain gambling project ZKasino is facing a firestorm of controversy after abruptly changing plans regarding user funds. Over $33 million worth of investor and user ETH, initially promised to be returned, has been moved to staking protocol Lido, sparking accusations of an exit scam.
Broken Promises and Unfulfilled Expectations
On April 20th, ZKasino announced its network launch. However, for over 10,000 users who bridged a combined 10,515 ETH to the platform expecting repayment, the news was bleak. ZKasino’s blog post revealed a stark deviation from its initial plan. Instead of returning the ETH, the project converted it all to its ZKAS token at a discounted rate with a lengthy 15-month vesting schedule.
This move, framed as “a favor” to ensure a “seamless transition,” raised red flags for many. ZKasino’s website was also edited, removing a crucial statement guaranteeing the return of ETH. Additionally, on-chain transactions showed the transferred ETH deposited into Lido, further fueling user concerns.
Related: ZKasino Launch Turns Chaotic: $33 Million in Ether Locked, Rug Pull Allegations Surface
Adding to the controversy, an anonymous developer (“cygaar”) questioned the legitimacy of ZKasino’s blockchain technology. He alleges it’s a readily deployable solution lacking the promised zero-knowledge tech and EigenDA features.
On social media, a wave of user backlash emerged. Hundreds of individuals claiming to be ZKasino investors bombarded platforms with accusations of fraud. Some even resorted to doxing (revealing personal information) the project’s founder, “Derivatives Monke,” and demanding legal recourse.
Investor Denials and Platform Silence
Venture capital firm Big Brain added fuel to the fire. They claimed in a social media post that ZKasino “appears fraudulent” and that they were never actual investors. This contradicts ZKasino’s earlier claim of a $350 million Series A round with Big Brain as a participant.
Further complicating matters, crypto exchange MEXC, another supposed investor named by ZKasino, distanced itself from the project. They stated they were “just one of the investors” and that ZKasino’s actions “have nothing to do with us.”
ZKasino has remained largely silent amidst the mounting accusations. Their social media presence has been limited to generic updates unrelated to the user concerns. The project founder, Derivatives Monke, offered a single, dismissive response to a critical user comment and shared a recent project update with the caption “keep building,” seemingly oblivious to the community’s outrage.
Unresolved Issues and Uncertain Future
The situation surrounding ZKasino remains highly volatile. With user funds locked in staking, unanswered questions about technology, and accusations of fraud swirling, the project’s future hangs in the balance. Whether ZKasino can weather this storm and rebuild trust with its user base is yet to be seen.
About The Author
