The developers of the ZKasino blockchain casino sent 10,515 ETH worth $33.9 million to the Lido betting protocol instead of returning these funds to users and investors.
Ethereum was deposited by early participants of the project through a bridge for the pharma of the native ZKAS token. The project team promised that they would be able to return the sent assets.
However, in a message dated April 20, ZKasino announced the launch of the network and "changes to the initial plan." The platform allegedly converted all received ETH into ZKAS "at a reduced rate of $0.055" with a 15-month vesting.
"This transformation is done as a favor to our users who have joined the ecosystem," the blog says.
The developers also changed the wording on their website, removing the statement that talked about the return of ETH.
EmberCN analysts drew attention to the suspicious transfer of funds to Lido.
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
"ETH was contributed by ZKasino users for farming. As a result, the project team changed the official description of the site and forcibly exchanged ETH for their platform token," the researchers explained.
A Web3 developer under the nickname cygaar said that the launched ZKasino is "an Arbitrum Nitro chain, the deployment of which took two minutes." In addition, the protocol does not use zero-knowledge proof and EigenDA, despite the statements of the team.
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
At the same time, investors and users of the X platform left many messages warning about the scam. The venture capital firm Big Brain wrote that it had never invested in ZKasino, and the project itself seemed fraudulent to it.
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 invested in ZigZag Exchange in 2022, which subsequently resulted in financial losses for us. Some of the co—founders of this project are now part of the ZKasino team, which looks dirty," the company noted.
In one of the threads, the alleged founder of ZKasino, under the nickname Derivatives Monk, responded to a user's message that he would be "sued for stealing $30 million."
You're a 60 year old boomer hanging out with 20 year old kids.
— Derivatives Monke (@Derivatives_Ape) April 20, 2024"You're a 60-year-old boomer hanging out with 20-year-old kids," he wrote.
The ZKasino team did not make any other statements regarding the current situation.
Recall that in March, the price of the Candy token collapsed by 87% after an alleged rug pull by the Lena Network developers. The incident occurred a few hours before the project announced the abandonment of ownership of the coin contract.
In February, the developers of RiskOnBlast, a gaming platform on the Blast L2 network, withdrew 420 ETH belonging to users in the amount of about $ 1.25 million, disabling the site and social networks.