Vitalik Buterin points to ZKasino’s misuse of ‘zero knowledge’ in $33 million fraud.
Ethereum co-founder Vitalik Buterin said the ZKasino issue was evidence that the term “zero knowledge” (ZK) had become popular enough in the industry to attract misuse by fraudsters.
Buterin’s comments follow revelations that an estimated $33 million worth of Ethereum (ETH) was lost due to a blockchain-based gambling platform abusing its users.
According to Buterin:
“There is no “ZK” in ZKasino other than it is in zksync. Is that right? I think we’ll have to adapt. Even “ZK” has now become such a mainstream buzzword that full-blown scammers have adopted it.”
Surprisingly, the project has continued to post on its official account on social media platform X, ignoring the community’s concerns.
ZKasino Rug Pull
Concerns about ZKasino emerged on April 21, when community members discovered that a previous promise to refund more than 10,500 bridge Ethereum used to farm ZKAS tokens had been removed.
On-chain data later showed that the company placed users’ ETH into Lido, an Ethereum-based liquid staking protocol.
In a statement, the ZKasino team claimed to have acted in the community’s interest by converting all bridged ETH to ZKAS at a discounted price of $0.055, following a 15-month vesting schedule.
This explanation sparked widespread condemnation and investigation from the cryptocurrency industry.
Cryptocurrency Detective ZachXBT highlighted ZKasino founder Ildar Elham’s dubious history points to past instances of non-payment of debts, delays in announcing prizes, evasion of betting payments, and failure to reimburse users after internal phishing attacks.
Additionally, cryptocurrency developer Cygaar charge ZKasino’s blockchain was the Arbitrum Nitro chain, deployed in two minutes. He added that contrary to the project’s claims, the chain lacks zero-knowledge technology or EigenDA.
Investors Reject
After recent events, numerous investors and supporters of ZKasino have distanced themselves from the project.
MEXC, the platform’s prominent exchange backer, canceled its planned listing for the ZKAS token. MEXC participated in the protocol’s Series A funding round.
Additionally, venture capital firm Big Brain said it had never invested in the project, saying ZKasino “appears to have engaged in fraudulent activities.” that Added:
“We have never invested in ZKasino, but we have been offered a prorated token distribution, but we have not yet received it and will not receive it in the future.”
