ZKasino Accused of $33 Million Fraud as MEXC Cancels Token Listing

ZKasino, a decentralized online casino, accused of transferring $33.18M in user funds to Lido Finance instead of returning them. Widespread backlash and allegations of fraud prompt firms to distance themselves from the platform.

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Salman Khan
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ZKasino Accused of $33 Million Fraud as MEXC Cancels Token Listing

ZKasino Accused of $33 Million Fraud as MEXC Cancels Token Listing

ZKasino (ZKAS), a decentralized online casino platform, is facing allegations of fraudulent activity and mishandling of user funds. According to reports, the project allegedly transferred $33.18 million in user Ether deposits to the Lido Finance protocol, instead of returning the funds to users as promised.

The project's website had previously stated that user Ether deposits would be returned once the ZKasino Chain was launched, but this information was later removed. This led to widespread criticism and backlash from the community, with several platforms, including MEXC exchange, canceling their planned Initial DEX Offering (IDO) for the ZKAS token.

An analysis of on-chain data shows that ZKasino transferred 10,515 ETH ($33.18 million) deposited by users to the Lido Finance platform. Previously, ZKasino had announced a $350 million Series A financing round, but there are claims that this valuation and the participating investors were fabricated.

ZigZag, another cryptocurrency platform, had previously published claims that the ZKasino team was fraudulent. Big Brain Holdings, an investor in ZKasino's Series A round, stated that they had previously invested in the zigzagexchange project, which resulted in financial losses, and some of the previous founders of that project are now part of the ZKasino team.

Why this matters: The ZKasino incident highlights the importance of transparency and accountability in the decentralized finance (DeFi) space. It underscores the need for thorough due diligence by investors and the potential risks associated with unvetted cryptocurrency projects.

Despite the growing concerns and accusations, the ZKasino founder, Derivatives Monkey, has only responded with a cryptic "Keep building" message, further angering the community and prompting calls for him to face consequences. The situation surrounding ZKasino is still unfolding, and more firms may distance themselves from the platform in the coming days as the allegations of fraud continue to mount.

Key Takeaways

  • ZKasino, a decentralized online casino, accused of fraudulent activity and mishandling user funds.
  • ZKasino allegedly transferred $33.18 million in user Ether deposits to Lido Finance, instead of returning them.
  • Widespread criticism and backlash from the community, with some platforms canceling planned ZKAS token offerings.
  • Claims that ZKasino's $350 million Series A financing round and participating investors were fabricated.
  • Importance of transparency and accountability in DeFi, as the situation surrounding ZKasino continues to unfold.