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ZKasino, a blockchain-based gambling project, has sparked widespread outrage within the crypto community after abruptly shifting $33 million worth of investor and user funds to the Lido staking protocol.
The community is enraged because ZKasino’s move deviated from its initial promise to return the funds to its users.
ZKasino backpedals on initial promise
ZKasino had initially garnered significant attention, with over 10,000 users bridging a total of 10,515 Ethereum (ETH) to the new network, which was launched on April 20, in anticipation of acquiring the ZKasino (ZKAS) token.
However, instead of honouring their commitment to return the ETH, ZKasino announced a change in plans.
The bridged ETH was converted to ZKAS at a discounted rate of $0.055, subject to a 15-month vesting schedule, leaving investors and users bewildered.
Following the controversial move by ZKasino, suspicions and allegations began to surface. Some users noticed alterations on ZKasino’s website, where statements guaranteeing the return of ETH had been removed.
Additionally, a crypto developer raised doubts about the authenticity of ZKasino’s blockchain, suggesting it lacked the promised zero-knowledge technology.
The funniest part of the Zkasino drama is that the chain they released has no zk tech in it at all (nor does it use EigenDA).
It's an Arbitrum Nitro chain that took 2 minutes to deploy.
They put ZERO effort into scamming everyone lmao. pic.twitter.com/VkKYZWttGl— cygaar (@0xCygaar) April 21, 2024
The controversy intensified when it was revealed that all the bridged 10,515 ETH had been transferred to the Lido staking protocol.
8 小时前,ZKasino 将用户桥接存入 ZKasino 的 10,515 ETH($33.18M) 转移到 0x791 多签地址,然后存进 Lido 生息去了😢https://t.co/k15pZ8a6DW
这些 ETH 是用户桥接存入 ZKasino 挖矿,结果 ZKasino 项目方一招修改官网说明,强行将用户存款的 ETH 换成了他们的平台代币🤡 pic.twitter.com/1F9OUPB5Pt— 余烬 (@EmberCN) April 21, 2024
Social media platforms are currently abuzz with accusations of ZKasino being an exit scam, with some individuals resorting to sharing personal information about the project’s founder, known as “Derivatives Monke.”
Further controversy on ZKasino’s Series A funding
To further complicate matters, venture capital firm Big Brain Holdings claimed that it had never invested in ZKasino and had not received the pro-rata token distribution promised to them contradicting ZKasino’s previous announcement of securing a Series A investment round at a $350 million valuation, with support from crypto exchange MEXC and Big Brain Holdings, among others.
Big Brain Holdings invested into the @zigzagexchange project in 2022, which subsequently resulted in financial losses for us. Some of the previous founders of that project are now part of the @ZKasino_io team, which appears to be fraudulent.
We have never invested in ZKasino…— Big Brain Holdings (@BigBrainVC) April 21, 2024
On the other hand, MEXC distanced itself from the project, stating that ZKasino’s behaviour was unrelated to them.
ZKasino remains mum amidst the backlash
Despite the mounting backlash and accusations, ZKasino has remained relatively silent on social media platforms, only posting updates about integrating EIP-3074.
However, as the controversy unfolds, investors and users are left grappling with unanswered questions and concerns about the project’s integrity.
The post ZKasino redirects $33M ETH clients’ funds to Lido contrary to its promise appeared first on Invezz
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