ZKasino Accused Of Rug Pull As $33 Million In Investor Funds Are Sent to Lido

Updated: 22 April 2024

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Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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Crypto betting site ZKasino is facing rug pull allegations after the developer unexpectedly changed plans and sent $33 million worth of investor funds to Ethereum staking platform Lido.

The ZKasino network launched on April 20, after more than 10,000 users had bridged 10,515 ETH to the network in hopes they will receive extra $ZKAS tokens and their ETH back.

But on launch day, ZKasino announced it was making changes to the original plan. All bridged ETH was converted to $ZKAS at a rate of $0.055 and vested for 15 months.

The platform said these changes were “done as a favour” to offer a seamless transition as the protocol does not use Ether. The platform did not say whether the Ether will be returned to investors.

Investors have now taken to X to demand their ETH back, but ZKasino remains unbowed, terming the concerns “FUD.”

We might have just witnessed the biggest rug in 2024

Investing early in Zkasino cost us over $33M

Official Telegram's gone, they dumped a massive amount of ETH on Lido, and the founders vanished.

Let’s break down the investigation🧵👇 pic.twitter.com/tYoG4qzQhN

— arndxt (@arndxt_xo) April 22, 2024

A Controversial Project

The missed refunds are not the only controversy surrounding Lido. The project closed a Series A funding round in March, claiming backing by the MEXC exchange and Big Brain Holdings.

But now Big Brain has said that the claims are false. In a post on X, the venture firm said it previously invested on the ZigZag exchange, whose team later joined ZKasino, and made financial losses.

“We have never invested in ZKasino but were offered a pro-rata token distribution that we have not received and will not opt to receive,” said Big Brain.

Big Brain Holdings invested into the @zigzagexchange project in 2022, which subsequently resulted in financial losses for us. Some of the previous founders of that project are now part of the @ZKasino_io team, which appears to be fraudulent.

We have never invested in ZKasino…

— Big Brain Holdings (@BigBrainVC) April 21, 2024

Blockchain sleuth ZachXB has previously said Derivative Monke, ZKasino’s founder, and the team were “proven bad actors.”

The MEXC exchange has cancelled the $ZKAS token listing, citing concerns from the community.

As investors count losses from their dealings with ZKasino, crypto casino Mega Dice, which launched its DICE token presale last week, is garnering much interest after raising more than $438k.

Mega Dice is an established crypto casino brand with over 50,000 players and more than 4,000 games from top sports and esports providers globally.