$33M Controversy Surrounds ZKasino Following Protocol Launch
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$33M Controversy Surrounds ZKasino Following Protocol Launch

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Created 6mo ago, last updated 6mo ago

ZKasino, a crypto project that had gained attention with its $350 million valuation and the backing of investors like MEXC, Big Brain Holdings, Trading Axe, Pentoshi and 0xSisyphus.

$33M Controversy Surrounds ZKasino Following Protocol Launch

ZKasino, a crypto project that had gained attention with its $350 million valuation and the backing of investors like MEXC, Big Brain Holdings, Trading Axe, Pentoshi and 0xSisyphus, found itself embroiled in turmoil following the launch of its mainnet and token, ZKAS. The project, which had initially promised participants the option to redeem their bridged ether 1:1, while farming ZKAS tokens, shocked investors by automatically vesting the funds into $ZKAS tokens instead. Over $33 million in ETH were bridged to the network.

Prior to the launch, ZKasino had faced warning signs and allegations of mismanagement. Accusations of stolen funds from ZigZag's treasury and unpaid contractors were raised by blockchain sleuth ZachXBT against the project's team. Additionally, ZKasino's founder, known as Derivatives Monke, had stirred controversy with a graphic video and sarcastic remarks, later issuing an apology.
When the protocol finally went live after multiple delays, investors were taken aback by the sudden change in plans. Instead of the promised ether refunds, their funds were converted into $ZKAS tokens, with a claim that it was done to “provide a seamless transition and a superior user experience.” However, users revolted against this decision, pointing out alterations to ZKasino's website that had removed references to ether refunds. Furthermore, the vesting period for $ZKAS tokens was extended to fifteen months, fueling allegations of a rug pull. Thousands of investors expressed their anger and frustration, sharing personal information about Derivatives Monke as they sought to recoup their capital.

Token launchpads Ape Terminal and AIT Launchpad canceled ZKasino's Initial DEX Offering (IDO), while MEXC removed the listing of $ZKAS from its exchange. The $33 million worth of ETH was deposited into the staking platform Lido, in a move that was not announced by the team.

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