Home / News / Technology / ZKasino Scam Update – Vitalik Buterin Says Zero-Knowledge Buzzword Manipulated by Scammers
Technology
3 min read

ZKasino Scam Update – Vitalik Buterin Says Zero-Knowledge Buzzword Manipulated by Scammers

Last Updated April 25, 2024 3:32 PM
James Morales
Last Updated April 25, 2024 3:32 PM

Key Takeaways

  • ZKasino’s founders appear to have disappeared with over 10,000 ETH deposited by users.
  • Vitalik Buterin has lamented the fact that ZK is now a mainstream enough buzzword that full-on scammers are adopting it.
  • Disgruntled victims have formed a task force to track down the perpetrators of the scheme.

Under the weight of mounting fraud allegations, users who locked nearly $33 million worth of ETH on the ZKasino are wondering whether their deposits will ever be returned.

Joining the rising tide of criticism, Ethereum founder Vitalik Buterin has suggested the team behind  ZKasino are “full-on scammers” who only referenced zero-knowledge proofs to give the project a veneer of legitimacy. 

Vitalik Butertin Calls Out ZKasino Scammers

In the space of a few days, ZKasino has gone from exiting new decentralized gambling platform to what might be the biggest rug pull of the year. 

Having taken 10,515 ETH in deposits, ZKasino changed its terms at the last minute, removing any mention  of users being able to redeem their bridged assets. (Which have now been deposited in Lido staking pools.)

The “ZK” is ZKasino stands for zero-knowledge, referring to the cryptographic proofs that are meant to enable trustless economic frameworks.

But as Buterin pointed out in a post  of Farcaster, “there is nothing “ZK” about ZKasino except that it lives on ZKSync.”

“Even ‘ZK’ is now a mainstream enough buzzword that full-on scammers are adopting it,” he added.

ZKasino Founders Doxxed by Angry Investors

On April 20, a group of disgruntled investors formed a Telegram group , ZKasino Legal Task Force, with the intention of taking legal action against the platform’s administrators. 

ZKasino
Disgruntled investors have created a Google Drive to share information on ZKasino’s founders.

The group has collected evidence on and doxxed the platform’s pseudonymous founders and encouraged victims to report them for fraud. However, they appear to be relying on law enforcement agencies to act and haven’t hired any lawyers.

Financial Backers and Exchanges Cut Ties

With ZKasino’s founders having disappeared from public view, several of the platform’s backers have moved to distance themselves from the apparent rug pull.

On Sunday, Big Brain Holdings stated that although it invested in ZigZag Exchange, which was operated by some of the same founders, it was never involved in ZKasino. (Although the firm didn’t explain why it didn’t flag this earlier when ZKasino erroneously claimed it was an investor.)

Meanwhile, MEXC cancelled  a planned ZKAS listing and let participants in the ZKAS Kickstarter event keep USDT airdrops they were awarded as part of the promotion.

Ape Terminal and AIT Launchpad have also canceled Initial DEx Offerings for the token.

Was this Article helpful? Yes No