Ethereum co-founder Vitalik Buterin has spoken out against the misleading use of the term "Zero-Knowledge" (ZK) in connection with the ZKasino scandal, which has been accused of fraud involving $33 million worth of Ethereum (ETH).

ZKasino, a platform that claimed to offer blockchain gambling, has been accused of funneling 10,500 bridged Ethereum used in token farming into Lido, a liquid staking protocol on Ethereum. The platform had promised to refund these funds, but later deleted the promise, prompting allegations of fraud.

The ZKasino team has defended themselves by stating that they converted the bridged ETH to ZKAS tokens at a discounted rate and enforced a 15-month vesting period. However, this explanation has been met with criticism from the crypto community, who have accused the platform of misusing the term "Zero-Knowledge".

Noted crypto sleuth ZachXBT revealed that ZKasino founder Ildar Elham has a questionable past, including defaulting on debts and avoiding bet payments. Additionally, crypto developer Cygaar pointed out that the ZKasino blockchain does not utilize zero-knowledge technology, but instead uses an Arbitrum nitro chain.

As a result of these revelations, many investors and crypto platforms have disassociated themselves from ZKasino. MEXC, a top digital asset exchange, delisted the ZKAS coin, while venture capital firm Big Brain publicly stated that the ZKasino app is fraudulent and refused to accept any tokens in the future.

Buterin's critique highlights the challenges faced by the crypto sector in the use of buzzwords such as "Zero-Knowledge". It also underscores the need for greater attention and transparency in blockchain-related initiatives. With increased efforts from the community and regulators to strengthen controls, such incidents may become less frequent.