ZKasino Faces Backlash Over Unexpected $33 Million Fund Redirection to Lido Staking Protocol
Summary:
ZKasino, a blockchain gambling project, faces backlash for unexpectedly relocating $33 million worth of user and investor funds to staking protocol Lido instead of returning them as initially pledged. Users on platform X accuse the venture of being a fraud, while a venture capital firm, Big Brain, denied claims of its involvement or investment in ZKasino. Crypto exchange MEXC clarified it was "just an investor" and is also a victim of ZKasino's actions. Amidst the controversy, ZKasino has remained mostly silent.
ZKasino, a gambling project built on blockchain technology, is facing heavy criticism on X for unexpectedly redirecting $33 million worth of funds from users and investors to staking protocol Lido. The original commitment was to return these funds. An April 20 blog entry revealed that ZKasino's network was operational and more than 10,000 users who transferred a total of 10,515 Ether (ETH) to it were expecting to retrieve their ETH as originally stated. However, ZKasino declared a deviation from its initial plan, converting the ETH to ZKAS at an "adjusted rate of $0.055" via a 15-month vesting plan.
ZKasino stated that these changes were implemented to make the transition smoother, given that their chain doesn't rely on ETH. Users pointed out alterations in the site's language, notably the removal of a clause stating that ETH "would be returned." The situation was exacerbated by an on-chain transaction showing all 10,515 ETH belonging to users being shifted to the Lido staking protocol.
A crypto developer named "cygaar" claims the newly launched ZKasino blockchain was an "Arbitrum Nitro chain set up in two minutes," contrary to its promise to utilize zero knowledge technology or EigenDA. Numerous ZKasino users on X now accuse the venture of being a fraudulent scheme.
To add to the turmoil, Big Brain, a venture capital company, posted on X on April 21 stating ZKasino "seems to be deceitful" and it "did not invest in ZKasino," but was proposed a pro-rata token allocation that it did not acquire and "has no plan to claim."
This follows ZKasino's X post last month stating that it completed a Series A funding round with a $350 million valuation, claiming financial backing from crypto exchanges such as MEXC and firms like Big Brain Holdings. MEXC said (in translation) that it was "only an investor" and ZKasino's "conduct was unrelated to us. As investors, we are victims too."
Despite the torrent of grievances, information from ZKasino on X has been scant. The project shared an update about the integration of EIP-3074 on X. Derivatives Monke, the founder known on X, responded to a user criticizing ZKasino's recent activities and shared his project's newest X post with the caption "keep building.
Published At
4/22/2024 7:57:01 AM
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