Why ZKasino Mainnet Launch Is Stirring FUD Among Investors

• The ongoing ZKasino withdrawal troubles have ignited controversy within the crypto community.
• The platform’s investors have alleged sudden token swaps and restricted withdrawal access.
• Exchanges and institutions have also voiced concerns over ZKasino.

The crypto industry, like many finance-based sectors, has become increasingly targeted by malicious actors who prey on the asset class and its unsuspecting victims for personal gain. Among their arsenal of techniques is the rug pull , a method involving the nurturing of a project by its developers before swiftly vanishing with investor funds, which has become one of the most weaponized forms of scams.

The rising number of attacks has put the industry on high alert for unusual actions and signals, with a crypto betting platform recently stirring controversy by exhibiting all the warning signs.

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Is ZKasino a Scam?

On April 20, decentralized casino ZKasino announced the launch of its official mainnet. However, the launch failed to meet the optimism expected by the protocol, as nearly 10,000 participants voiced accusations of a potential exit scam on its official accounts.

Central to the ZKasino scam allegations was the sudden reversal of plans to refund investors’ bridged 10,515 Ethereum (ETH) , valued at approximately $33 million, which was forcibly converted into $ZKAS tokens instead of being redeemable as promised. 

Heightening the skepticism, the swap, described as a means to provide a seamless transition and simplify the user experience, was taken a step further with the transfer of user funds to staking protocol Lido. This move coincided with the protocol retracting their original statement assuring investors of asset return from its bridge interface.

The nonchalant response of ZKasino’s associates to questions about a potential scam, coupled with the reported ban of the platform’s official Telegram channels, has further intensified the ongoing FUD. According to X user defizard, the protocol’s weightless short-worded statements indicate the potential of a rug pull .

Another item of contention was the suspension of the pre-scheduled listing of ZKasino’s $ZKAS across several platforms. In a now-deleted blog post, crypto exchange MEXC announced the postponement of the protocol’s token listing and suspension of related services. Additionally, citing unforeseen risks and recent events, ApeTerminal and AITProtocol also revoked the planned initial DEX offerings (IDOs) of ZKasino, urging participants to claim refunds for their assets. 

The escalating skepticism has drawn attention to previous warnings issued by the firm’s associates and blockchain security specialists.

Experts Flag ZKasino as Fraudulent

Joining the discourse, on-chain sleuth ZachXBT spotlighted his previous warning regarding ZKasino, dated December 2, 2023, which emphasized the inconsistencies observed with ZKasino and its founder, IIdar Elham (Derivatives Monke).

ZachXBT stated that the ZKasino team consists of “proven bad actors” who have previously engaged in a series of fraudulent giveaways and unpaid investor wins, which significantly undermines its trustworthiness.

Echoing the ZKasino scam sentiment, venture capital firm Big Brain Holdings contested the protocol’s claims that it invested in a $350 million funding round. Asserting that it “never invested” in ZKasino, the firm stated that its support was lent to a project at ZigZag exchange in 2022, a firm formerly affiliated with the allegedly fraudulent casino founder.

ZigZag had previously warned of the DeFi casino platform as a fraudulent scheme, asserting that the platform is renowned for thefts and financial wrongdoings. Users have since intensified calls for assets refund, calling for legal intervention to bring both ZKasino and its founder IIdar Elham to justice.

On the Flipside

• In the wake of the news, US Google has provided the Suicide Crisis Lifeline when searching for “ZKasino withdrawal”.
• On April 16, ZKasino canceled a pre-scheduled event that was supposed to be held in Dubai, a move that investors have further described as part of its fraudulent scheme.
• Users are advised to maintain vigilance as several fraudulent phishing links posing as ‘ZKasino refunds’ have emerged across the social media platform X.

Why This Matters

The crypto industry and broader ecosystem heavily rely on trust, and fraudulent actions such as the alleged ZKasino exit scam could significantly rattle investor confidence in projects and protocols. This could lead to decreased participation over time, ultimately hindering industry growth.

Read more about the exit scams recently plaguing Ethereum L2s and how to stay safe:
Ethereum L2s Targeted by Ruggers: How to Spot These Rugpulls

Here’s how the SUI token is wavering between highs and lows amid market uncertainty:
SUI Surges 7% in Recovery Hopes After Week-Long Slumber