Bittime -ZKasino users are furious.blockchain based gambling projectwas accused of embezzling $33 million in user refunds. Instead of being returned, the funds were sent to the Lido staking protocol.
Chronology of Disappointment: ETH Replaced by ZKAS, Claimed as "Help"
On April 20, ZKasino announced the launch of their network. More than 10,000 users who bridged their Ethereum (ETH) assets to the ZKasino network in the hope of getting more ZKasino (ZKAS) tokens are now biting the bullet.
Through a blog post, ZKasino actually stated "changes from the original plan." All bridged ETH is converted into ZKAS at a “discounted price of $0.055” and a vesting schedule of 15 months.
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ZCasino argued this change was an “aid” to provide a “seamless transition” since their chain does not use ETH. Users also noticed changes to the ZKasino website, where the statement regarding ETH returns was removed.
Suspicious On-Chain Transfers and Fake Technology Claims
Concerns mounted after an on-chain transfer showed ZKasino moving all 10,515 users' ETH to the Lido staking protocol . Not only that, an anonymous crypto developer named "cygaar" claims the blockchain released by ZKasino is just "an Arbitrum Nitro chain that can be created in 2 minutes" and does not use zero knowledge or EigenDA technology as promised.
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On social media, hundreds of ZKasino users who were suspected of being victims accused the project of being an exit scam (pump and dump scheme fraud). In fact, several parties distributed the personal information and address of the founder of ZKasino known as "Derivatives Monke" in an effort to urge legal action.
Controversy Heats Up: Investors Deny Involvement
The venture capital company Big Brain also added to the heat of the controversy. Through a social media post on April 21, Big Brain stated ZKasino was "suspected of fraud" and had "never invested in ZKasino". Big Brain admitted to having been offered a proportional token distribution which they have not accepted and "will not accept".
Previously, ZKasino claimed to have closed a Series A investment round at a valuation of $350 million. The fund is backed by crypto exchange MEXC and venture capital firm Big Brain Holdings.
In response, crypto outlet TechFlow on April 21 reported that MEXC (translated) stated it was "just one of the investors" and "ZKasino's behavior has nothing to do with us. As investors, we are also victims."
ZCasino Silent, Founder Still "Building"
ZKasino has been virtually silent on social media amid a storm of criticism. This project only posts casual updates about EIP-3074 integration.
The founder of ZKasino, Derivatives Monke, responded to critical comments from users on social media. He also shared the latest upload of his project with the caption "keep building". However, this response was deemed unsatisfactory and seemed to ignore the serious accusations leveled against ZKasino.
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Conclusion: Future of ZKasino Bleak?
With a series of controversies emerging, the future of ZKasino is in question. Loss of user trust, false technology claims, and alleged embezzlement of funds are black spots that are difficult to erase. ZKasino needs to immediately provide transparent clarification and restore user trust if it wants to survive in the competitive crypto industry.
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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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