Blockchain Gambling Project Faces Scrutiny Over Alleged $33 Million 'Rug Pull'

In a bid to regain investor trust, blockchain-based gambling platform ZKasino has announced a 72-hour "2-step bridge back process" to facilitate the return of deposited Ether (ETH) to its investors. This move comes after allegations of a $33 million "rug pull" in April, which ZKasino has vehemently denied.

In a Medium post dated May 28, ZKasino detailed the refund procedure, emphasizing the project's ongoing commitment to success. "We are now initiating the 2-step bridge back process in which bridgers can sign up and bridge back their ETH at a 1:1 ratio," the post read. The team reiterated their dedication to the project, stating, "The ZKasino team is still working hard to make the project successful. We again want to assure everyone that we are here to deliver and continue our best efforts."

The refund process requires investors, referred to as "bridgers," to return their entire Zkasino (ZKAS) token balance from the original address used for their initial ETH investment. Following a data verification process, a claim portal will be opened for investors to retrieve their ETH. However, this process comes with a caveat: investors will forfeit any allocated ZKAS tokens and the remaining 14 months of ZKAS release.

The announcement has sparked mixed reactions. Some investors have questioned the rationale behind the limited 72-hour window, while others have expressed concerns about the sign-up page potentially being a scam or wallet drainer.

Interestingly, the Medium post was not shared via ZKasino's official X (formerly Twitter) account but was instead posted by "Derivatives Monke," a key figure in the project who has been central to the controversy.

Last month, ZKasino faced heavy criticism for failing to return investor ETH after its network launch. Instead, the platform redirected $33 million worth of investor and user funds to Lido for staking, diverging from their initial promises. The platform explained this move by stating it "made changes from our initial plan," converting all bridged ETH to ZKAS at a "discounted rate of $0.055" on a 15-month vesting schedule. This led to widespread accusations of an "exit scam."

The situation escalated on April 29 when Dutch authorities arrested an individual suspected of being involved in the alleged rug pull. Shortly after, approximately two-thirds of the funds were returned to the ZKasino multisig wallet. Derivatives Monke took to X to publicly deny the rug pull allegations, stating, "We regret that misinformation has been spread regarding the ZKasino_io project. We strongly reject FIOD’s and Binance’s claims that ZKasino has committed a so-called ‘exit scam’ or ‘rug pull.’"

As the 72-hour refund window unfolds, the blockchain community remains vigilant, watching to see how ZKasino will navigate this turbulent period and whether it can restore its credibility among its investors.