Vitalik Buterin, co-founder Ethereum, addressed important issues regarding the ZKasino scam. He also noted that the term “zero knowledge” (ZK) had been incorrectly used in connection with mass fraud. The scandal involved the loss of approximately $33 million worth of Ethereum (ETH) due to platform fraud.
ZKasino accused of abusing Ethereum on Lido
Z Casino It claimed to offer blockchain gambling, but failed to deliver on that promise. On April 21st, community members sounded the alarm after discovering that the refund promise for over 10,500 bridge Ethereum used for token farming had been removed. Further investigation revealed that ZKasino was funneling this funds into his Lido, a liquid staking protocol on Ethereum.
In its defense, the ZKasino team claims that it converted Bridge ETH into ZKAS tokens at a discount rate of $0.055 and enforced a 15-month vesting period. However, this announcement faced significant criticism from the crypto community.
Vitalik Buterin criticizes misuse of crypto buzzwords
ZachXBT, one of the leading cryptocurrency sleuths, has exposed the infamous past of ZKasino founder Ildar Elham. Elham was charged with default and evading payment of bets. He is also suspected of failing to pay for an internal phishing attack. Another crypto developer, Cygaar, noticed that the ZKasino blockchain does not utilize zero-knowledge technology. He insisted it was more than just a thing. Arbitrum Nitro Chains are built in just 2 minutes.
After these revelations, many investors and crypto platforms terminated their relationships with ZKasino. Mexico, one of the top digital asset exchanges, has delisted ZKAS coin. The company had already backed the platform during its Series A funding.
Venture capital firm Big Brain has publicly stated that the ZKasino app is clearly fraudulent. They made their position clear by stating that they have no investment and refuse to accept any tokens in the future. This declaration is an example of a broader industry response aimed at minimizing risks associated with similar blockchain projects.
Vitalik Buterin This critique is indicative of the challenges facing the crypto sector regarding the use of buzzwords such as “zero knowledge.” It also shows that more attention and openness should be paid to blockchain-related initiatives. As a result, such incidents will become less frequent as communities and regulators seek to tighten controls.
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