ZKasino issued a refund announcement, but the promise to return funds is a trick? Is the promise to return investors fun

Compiled by: Jordan, PANews

Reference: MediumZKasino

On the evening of May 28, ZKasino, a decentralized betting platform that had previously attracted 10,515 ETH (approximately US$33.2 million) through a bridge reward event, released information through the Medium platform, announcing the launch of the ETH bridge return process for bridgers who choose not to participate in the ZKAS conversion. Bridgers can register by depositing the first batch of ZKAS bridge rewards they received. Once registered, they will give up the remaining 14 months of ZKAS release tokens.

How does a good hand get ruined?

As a blockchain gaming infrastructure project, ZKasino completed its Series A financing in March this year with a valuation of US$350 million, with participation from MEXC, Big Brain Holdings, Trading_axe, Pentoshi and Sisyphus. Although the specific amount of financing was not disclosed, the community seems very optimistic about the future of this project.

However, just one month later, Big Brain Holdings stated that it had never invested in ZKasino but was offered a proportional distribution of tokens, which Big Brain Holdings did not receive and would not choose to accept. In mid-April, ZKasino announced that its bridge reward activity had ended, with the final bridge funds reaching 10,515 ETH (about 33.2 million US dollars). However, the community found that the project officials did not mention the specific time for opening withdrawals, and some users found that ZKasino deleted the Ethereum will be returned and can be bridged back in the Bridge funds interface, resulting in users being unable to withdraw funds.

In fact, rumors of ZKasino project fraud have been circulating in the community. ZigZag, the zkSync ecosystem DEX, posted on the X platform that many people have recently accused the decentralized betting platform ZKasino team of defaulting on payments or defrauding in some way, and several former employees and contractors said they were not paid for their work. Ethereum co-founder Vitalik Buterin also posted a fake article, pointing out that ZKasino does not use any ZK (zero-knowledge proof) technology, it is just hosted on the zksync platform, and the term ZK is used by scammers.

In early May, the Netherlands Fiscal Information and Investigations Office (FIOD) announced the arrest of a 26-year-old man on suspicion of fraud, embezzlement and money laundering in connection with a massive ZKasino scam where victims around the world invested more than $30 million in cryptocurrencies. Dutch authorities seized more than €11.4 million ($12.2 million) worth of cryptocurrencies, real estate and luxury cars.

As the fraud came to light, ZKasino seemed to have no choice but to refund the community.

Is the promise to return investors funds another trick?

On May 28, ZKasino announced that it had initiated a two-step bridging process, returning ETH to bridgers who did not participate in the ZKAS conversion at a 1:1 ratio, and said that the team was still working hard and reassured that they would continue to do their best to make the project a success. However, after the announcement, many doubts still arose in the community, because people found that there seemed to be something fishy in ZKasinos two-step bridging process:

First, ZKasino only gives bridge participants 72 hours to register (UTC time May 28 14: 00-May 31 14: 00, all working days), and the registration function will be closed and deposits will be stopped after 3 days. This short period of time may prevent many people from withdrawing their deposits. It should be noted that users must register using the original ETH bridge deposit address that originally received the ZKAS bridge reward, then find their own ZKAS on the ZKasino EVM chain, and then deposit the ZKAS back into the smart contract controlled by ZKasino.

Secondly, ZKasino seems to have deliberately avoided the staking rewards obtained from user deposits. On-chain records show that after the Bridge-to-Earn program ended, ZKasino converted investors ETH into Lidos Wrapped Staked Ether. Given the current Lido staking yield of 3.3% and the recent rise in ETH prices, the staking rewards generated are expected to exceed US$100,000. Some community members questioned why the platform required them to go through another process instead of directly returning the ETH.

More importantly, whether intentionally or not, ZKasino once again bypassed a key element: time. ZKasino stated in the announcement that after the registration is completed, the registration data will be collected in the next few days (how many days? No specific time frame), and a new announcement containing data on which addresses can receive refunded ETH will be released as soon as possible (as soon as possible? No specific time frame) for public verification. ZKasino stated that after the data is verified, the claim portal will be opened, and bridgers will be able to receive their ETH at a 1: 1 ratio from the new, audited bridge contract on the Ethereum mainnet – again, there is no specific time.

In short, despite ZKasino’s insistence that it is operating legally, legal issues, investor skepticism, and the recent refund announcement have left many questions unanswered. As the 72-hour deadline approaches, the crypto community is watching closely to see if ZKasino will actually deliver on its promises, or if further complications will arise.

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