ZKasino, a blockchain-based gambling project, is under fire on X for redirecting $33 million worth of user funds, originally intended for refunds, to staking protocol Lido. The move diverged from the project's initial commitment to return the funds to users.

In an April 20 blog post, ZKasino announced the launch of its network. However, over 10,000 users who had bridged a total of 10,515 Ether to the network were surprised to learn that their ETH would not be returned as promised. Instead, ZKasino converted all bridged ETH to its native ZKasino (ZKAS) tokens at a discounted rate of $0.055, with a 15-month vesting schedule.

This abrupt change in plans sparked outrage among users, especially after ZKasino transferred all 10,515 ETH to the staking protocol Lido. Additionally, users noticed alterations to the project's website, removing previous statements indicating the return of ETH.

The situation escalated further as an anonymous crypto developer, known as "cygaar," revealed discrepancies in ZKasino's blockchain technology claims. Despite ZKasino's assertions, cygaar stated that the released blockchain lacked zero-knowledge technology or EigenDA, leading many users to accuse the project of running an exit scam.

On X, numerous posts from purported ZKasino users voiced allegations of fraud and demanded legal action against the project's founder, known as "Derivatives Monke." Additionally, venture capital firm Big Brain raised concerns, asserting that ZKasino appeared to be fraudulent and refuting claims of investment involvement.

Despite mounting criticism, ZKasino and its affiliates have remained largely silent in response to inquiries. The project posted a routine update regarding the integration of EIP-3074 on X, while Derivatives Monke has maintained a stoic demeanor, urging continued project development amid the backlash.