ZKasino, a Web3 gambling protocol, is facing criticism for not returning users’ Ether over two months after launching a refund signup app. Users claim the app collected their ZKAS tokens without issuing refunds. The project was previously accused of being an exit scam. On May 28, ZKasino announced plans to return funds bridged to the network but has since faced backlash from users who report no progress.
A user who wished to remain anonymous told Cointelegraph that they invested the equivalent of a year’s salary for retirement, which remains inaccessible. The user stated that the team assured them their ETH would be returned.
ZKasino claims to be a Web3 gambling project under development within the ZkSync ecosystem of Ethereum layer-2 networks. The signup app contract, called “BridgeBackReceiver,” shows that thousands of ZKAS tokens have been deposited since May 28.
On July 29, a transaction moved 26.6 million ZKAS tokens from the signup app to an account ending in “F72F,” suggesting team involvement. Since this transfer, no further transactions have occurred.
ZKasino’s May 28 announcement indicated that user data would be collected and a claim portal would be opened for Ether retrieval. However, the ETH remains in the development team’s multisig wallet, with no updates provided. Attempts by Cointelegraph to contact ZKasino via Telegram went unanswered.
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ZKasino issues apology and refund statement
On August 14, ZKasino released a statement claiming they are cooperating with authorities to compensate affected investors. The statement acknowledged difficulties with the refund process, citing its complexity as a barrier for many users.
Bridge to earn controversy
In a Medium post on April 23, blockchain investigator DKCrypto accused the team of misleading users with a bridge to earn scheme launched on March 15. Users were led to believe they would earn rewards by bridging their ETH to the ZKasino network. According to DKCrypto, this was not an investment but a reward for participation, with assurances that ETH would be returned alongside ZKAS tokens.
DKCrypto claims to have never received his funds despite assurances from the team. The ZKasino team later announced that users would receive ZKAS instead of ETH, converting bridged ETH to ZKAS at a discounted rate of $0.055.
Blockchain data shows the team transferred users’ ETH to the Lido staking platform, later returning it to the team’s multisig wallet. This refusal to allow ETH withdrawals prompted legal action. On May 3, Dutch authorities arrested a man connected to ZKasino for fraud and embezzlement, seizing $12 million in assets. The suspect is believed to be co-founder Elham N., known as Derivatives Monke on X.
Other alleged co-founders include Ildar I. A., known as Prometheus, and Lyor, known as Sigman. On May 9, Derivatives Monke asserted on X that ZKasino is not a scam and that all ETH is secure in the multisig wallet.
Concerns over potential exit scams, or “rug pulls,” are prevalent in crypto. On July 22, ETHTrustFund DAO withdrew $2 million and moved it to mixer apps, causing investors to lose their deposits. Similarly, Gemholic transferred $3.3 million to Ethereum mainnet and erased its online presence, leaving investors with losses.
Cre: cointelegrap
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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