ZKasino, a blockchain-based gambling project, faced criticism after it shifted $33 million worth of investor and user funds to the Lido protocol, deviating from its initial commitment to return the funds. Initially, ZKasino announced its network launch on April 20, revealing that over 10,000 users had bridged 10,515 Ethereum to obtain ZKasino (ZKAS) tokens with the expectation of reclaiming their ETH as promised.
However, ZKasino altered its plan, stating that all bridged ETH would be converted to ZKAS at a discounted rate of $0.055 over a 15-month vesting period. This abrupt change stirred concerns among users, especially as the project removed the statement guaranteeing the return of ETH from its website. Furthermore, users discovered that ZKasino transferred all the bridged ETH to the staking protocol Lido.
Amid mounting suspicions, an anonymous cryptocurrency developer revealed that ZKasino's blockchain lacks the zero-knowledge technology or EigenDA it purported to use, raising doubts about the project's integrity. Hundreds of posts on X, a popular online forum, accused ZKasino of being an exit scam, leading some users to share the personal information of the project's founder, known as "Derivatives Monke," in a bid for legal action.
Venture capital firm Big Brain also weighed in, labeling ZKasino as potentially fraudulent and asserting that it never invested in the project despite receiving a pro-rata token allocation. ZKasino previously boasted a successful Series A investment round valued at $350 million, allegedly backed by notable entities like cryptocurrency exchange MEXC and Big Brain Holdings. However, MEXC distanced itself from ZKasino's actions, emphasizing that it was just one of the investors and claimed victimhood alongside other stakeholders.
Amid the controversy, ZKasino remained largely silent on X, offering minimal updates on the integration of EIP-3074. Derivatives Monke responded to criticisms by redirecting users to the project's latest X post titled "Keep Building," indicating a continued focus on development despite the negative sentiment surrounding the project.
