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ZKasino Users Urged to Reclaim Ethereum Amid Fraud Investigation

2 mins
Updated by Daria Krasnova
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In Brief

  • ZKasino users can reclaim ETH deposits amid fraud allegations; 72-hour window starts May 28.
  • Dutch authorities arrest man linked to ZKasino; seize €11.4M in assets, including real estate and crypto.
  • Crypto community skeptical of refund offer; concerns about scam tactics still persist.
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ZKasino, a crypto gambling platform, announced that users can reclaim their Ethereum (ETH) deposits amid significant controversy and allegations of fraud.

Users have a 72-hour window to sign up for the reclaim process.

Dutch Authorities Investigate ZKasino

On May 28, ZKasino stated that investors could reclaim their Ethereum (ETH) through a new “2-step backbridge process.” The announcement came after the Dutch authorities charged the platform with stealing $30 million in user deposits. 

Earlier this month, a 26-year-old Dutch man linked to ZKasino was arrested on charges of fraud, embezzlement, and money laundering. Authorities seized assets worth €11.4 million, including real estate, luxury cars, and cryptocurrencies.

Despite the encouraging news, the crypto community remains skeptical. The sudden offer to refund ETH without direct communication with Dutch authorities raised doubts. People question the offer’s legitimacy and worry it could be another scam tactic.

“They can send all our ETH back without playing these games,” one ZKasino Legal Task Force Telegram group member said.

The platform’s failure to mention the staking rewards earned from user deposits further complicates the situation. With the current Lido staking yield of 3.3% and ETH’s recent price rally, these rewards are estimated to exceed $100,000.

Read more: What Is a Rug Pull? A Guide to the Web3 Scam

ZKasino’s issues began in March with the “Bridge-to-Earn” program, which promised rewards for temporarily locking up ETH. When the redemption period arrived in April, ZKasino withheld approximately $30 million, leading to fraud allegations from investors and Dutch authorities.

These allegations gained prominence as complaints from the crypto community increased. ZigZag Exchange accused ZKasino’s developers of diverting development funds for personal use, while MEXC canceled its planned ZKAS token listing. Ape Terminal also canceled its Initial DEX Offering (IDO) linked to ZKasino, assuring refunds to all participants.

Read more: Identifying & Exploring Risk on DeFi Lending Protocols

Ethereum co-founder Vitalik Buterin also criticized the platform for its fraudulent misuse of zero-knowledge proofs, stressing that emerging technologies are increasingly becoming buzzwords exploited by scammers. 

“There is nothing “ZK” about ZKasino except that it lives on zksync, correct? I guess we have to adapt; even “ZK” is now a mainstream enough buzzword that full-on scammers are adopting it,” Buterin remarked.

The charges against ZKasino and the actions taken by authorities and the community show the risks in the crypto market. While the reclaim process promises users to get their money back, many still need to be convinced. This situation highlights the need for caution and careful research when using cryptocurrency platforms.

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Shota Oba
After interning at a domestic blockchain media company while enrolled at a university in international relations, he worked as an intern trainee at two foreign crypto asset exchanges. Currently, as a journalist, he focuses on the Japanese crypto asset market, both technical and fundamental analysis. He has been trading crypto assets since 2021 and is interested in economic and social affairs.
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