Vitalik Buterin, co-founder of Ethereum, remarked that the recent issues with ZKasino highlight the misuse of the term "Zero-Knowledge (ZK)" by fraudulent actors, indicating the term's growing prominence in the industry.

Buterin's statement came after revelations that the blockchain-based gambling platform had defrauded its users, resulting in approximately $33 million worth of Ethereum (ETH) being lost.

According to Buterin, the use of "ZK" in ZKasino is misleading since it is only associated with zksync. He noted the mainstream adoption of the "ZK" buzzword, even by full-fledged scammers.

Despite community concerns, ZKasino continued to post on its official social media account. The situation escalated on April 21 when users noticed the removal of a commitment to refund over 10,500 bridged Ethereum used for ZKAS token farming.

Further investigation revealed that the company had transferred users' ETH to the Ethereum-based liquid staking protocol, Lido. ZKasino defended its actions, claiming to act in the community's interest by converting bridged ETH to ZKAS at a discounted rate and subject to a vesting schedule.

However, these explanations were met with widespread criticism from the crypto industry. Various individuals, including crypto sleuth ZachXBT and developer Cygaar, raised concerns about ZKasino's founder and the authenticity of its blockchain technology.

As a result of these developments, several investors and supporters, including the exchange MEXC and venture capital firm Big Brain, distanced themselves from ZKasino, with some even labeling it as fraudulent.