ZKasino Fiasco: Crypto Betting Site Disappears With Investor Funds

The world of crypto and decentralized finance (DeFi) is no stranger to controversy, and the latest project to raise red flags is ZKasino, a gambling platform promising anonymity and high stakes. However, a storm of accusations paints a grim picture, suggesting ZKasino might be nothing more than a meticulously crafted house of cards ready to crumble.

ZKasino Accused Of Diverting Funds And Deceiving Investors

Trouble began brewing for ZKasino in March when ZigZag, a rival decentralized exchange, leveled serious accusations. ZigZag claims ZKasino not only lied about its funding but also diverted funds meant for development into personal pockets. The accusations don’t end there.

ZKasino allegedly failed to pay contractors who helped build the platform, further eroding trust.

I’m gonna lay this out since it gets worse and worse everyday.

Multiple people have approached me in the past week with allegations that the @ZKasino_io team owes them money or defrauded them in some way.

Multiple former employees and contractors have contacted me to let me…

— ZigZag Exchange (@ZigZagExchange) March 23, 2024

These allegations gained traction when ZKasino users voiced concerns about a broken promise. Initially, ZKasino promised users the ability to withdraw their bridged Ethereum (a process allowing Ethereum to be used on other blockchains) 1:1.

However, upon launch, users discovered their funds were locked in ZKasino’s token ($ZKAS) with a 15-month vesting period. This move fueled speculation that ZKasino was engaged in a “rug pull,” a notorious crypto scam where developers abandon a project after taking user funds.

Crypto Investors Scramble To Distance Themselves From ZKasino

The weight of these accusations proved too much for some of ZKasino’s initial supporters. MEXC, a major crypto exchange that participated in ZKasino’s funding round at a hefty $350 million valuation, distanced itself from the project.

In a public statement, MEXC claimed it was unaware of any potential rug pull and considered itself another victim of ZKasino’s alleged deception.

Another investor, Big Brain Holdings, echoed MEXC’s sentiment. While Big Brain Holdings didn’t directly invest in ZKasino, they had invested in ZigZag back in 2022. They allege that several former ZigZag founders are now part of the ZKasino team, a fact they now see as a red flag. Big Brain Holdings stated they would not accept their offered token distribution from ZKasino and expect other investors to follow suit.

The evidence against ZKasino paints a troubling picture. ZigZag’s claims, coupled with broken promises and investor backtracking, raise serious concerns about the project’s legitimacy. While ZKasino has yet to respond to the accusations, the silence only fuels speculation of a rug pull.

Featured image from Carpet Cleaning, chart from TradingView