ZKasino’s controversial ETH refund plan sparks outcry

ZKasino, a blockchain-based gambling project, has decided on user funds hotly debated in the crypto community. ZKasino had initially promised to refund Ether (ETH) users who had bridged into its system for its native token ZKasino (ZKAS). However, things took an unexpected turn when it announced new plans, leaving users flabbergasted and accusing its team of being involved in an exit scam.

In ZKasino’s blog post dated April 20th, the project went live, and more than ten thousand users collectively bridged 10,515 ETH, valued at about $33 million. These users expected to get their ETH back according to the initial commitment after collecting the ZKAS tokens. However, ZKasino disclosed that it “made changes from our initial plan” and instead converted all the bridged ETH into ZKAS at a “discounted rate of $0.055” but only on a 15-month vesting schedule.

According to the explanation, the move was “done as a favor” to give “a seamless transition” because the chain does not use ETH. Nevertheless, this claim by ZKasino raised more suspicions when it later removed from its website a statement indicating that those ETH would be returned, which were lent out like this before.

When all these events unfolded, further concern arose among community members, who eventually found out that all 10,515 ETH belonging to them were transferred into the Lido staking protocol, thereby raising questions regarding intentions by the team alongside security over funds.

Adding more fuel to this fire, an anonymous crypto developer named ‘cygaar’ pointed out that what was presented by blockchain ZKasino as zero-knowledge poseidon was Arbitrum Nitro Chain deployed within just two minutes without any zero-knowledge technology or EigenDA as alleged by them earlier.

Hundreds of posts from so-called miserable ZKasino users who had put their money into the project are popping up on social media platform X (formerly Twitter), accusing the team of an exit scam. Some users even shared the personal details and address of ZKasino’s founder, known as “Derivatives Monke,” urging legal action.

According to the gambling news, Big Brain Holdings, a venture capital firm that claims that ZKasino “seems to lack credibility” and was never an investor in the project despite ZKasino’s earlier claim regarding Big Brain backing its Series A investment round has taken an interest in this controversy.

Cryptocurrency exchange MEXC, also listed by ZKasino as one of its investors, said that we were just one of them and behaved nothing like us; we were victims and investors.

ZKasino has remained largely silent on x while Derivatives Monke and his creation, despite all the backlashes, have dodged most of these questions, with only a few responses demanding harsh criticisms or giving regular updates regarding any kind of technical advancement within the project.

The recent happenings involving ZKasino have revealed how important transparency, trustworthiness, and accountability are in projects where user funds are concerned. The community continues to grapple with these lessons, which should never be ignored, as they teach about investing in projects without thorough due diligence.

Edna Boykin

Edna Boykin started her career as a financial news writer. And, she was withal active in stock trading. From the commencement of her vocation, she is passionate about online poker games. As she likes to play poker and roulette, she knows the casino industry exhaustively. She recently joined Times of Casino as a news writer. She regularly contributes in-depth breaking stories and news updates of the casino industry.

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