Ethereum co-founder Vitalik Buterin has accused ZKasino, a blockchain gambling platform, of using ZK proof fraudulently.
The controversy kicked off following a rug pull that reportedly set users back some $32 million in Ethereum (ETH).
Buterin, a critical character in the crypto ecosystem, cautioned that emergent technologies are at risk of turning into buzzwords that are overused by dishonest entities.
"There's nothing 'ZK' about ZKasino, except that it lives on zkSync, right? Guess we all gotta get used to it; 'ZK' is now also mainstream enough a buzzword that full-on scammers are adopting it," Buterin mentioned.
Last month, ZKasino fell under some serious accusations of the decentralized P2P order book exchange—ZigZag Exchange. According to ZigZag, developers appropriated development funds for their personal benefit. ZigZag claims that the founder has diverted initial funding from the ZigZag Treasury, as he had a big control over financial decisions.
At first, these were the accusations that were a weakly heard issue, but with the growing complaints from the cryptocommunity, the issues got visibility.
Allegations were not left to ZKasino only, but they came to ZigZag, who also alleged that ZKasino had falsified claims about funding and hadn't compensated most of the developers and contractors. Actually, ZKasino could stand its ground and went ahead to continue posting on its official social media account, dismissing the community's concerns as FUD (Fear, Uncertainty, and Doubt).
After the official announcement, there was an immediate reaction to the news from the cryptocurrency market heavyweights. It is known that the reason for canceling the listing for the ZKasino token by the MEXC exchange was to protect users' rights and interests.
On this very day, Ape Terminal announced the cancellation of their Initial DEX Offering (IDO) for ZKasino, having a promise to refund everyone who was participating in it.
The drama around ZKasino had an effect on the financial transactions and indeed involved damages to certain reputations within the crypto community. It had initially promised to refund all the bridged Ethereum, something that greatly boosted its fundraising campaign. On the chain, data demonstrates that by the time of its closure, the deposit address for the campaign has accumulated over 10,500 ETH. He then reneged on the promise, which led to even more disillusionment from his supporters.
ZKasino faces backlash for misusing $33M in funds, misleading investors with unfulfilled technology promises, leading to accusations of fraud and distancing by investors.
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