ZKasino redirects $33M ETH clients’ funds to Lido contrary to its promise

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 controversy intensified when it was revealed that all the bridged 10,515 ETH had been transferred to the Lido staking protocol.

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.

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.