Vitalik Buterin, one of Ethereum‘s co-founders, has tackled important concerns regarding the ZKasino fraud incident. He also clarified the misuse of the term “Zero-knowledge” (ZK) in relation to this major scam. The fraud resulted in approximately $33 million in Ethereum (ETH) being stolen from the platform’s deceitful activities.
ZKasino Accused of Misusing Ethereum in Lido
ZKasino advertised blockchain gambling but fell short of its commitments. On April 21st, concerns were raised within the community when they discovered the removal of a refund pledge for over 10,500 Ethereum bridged from token farming. Subsequent probing unveiled that ZKasino had redirected this funds towards Lido, a liquid staking solution on Ethereum.
The ZKasino team justifies their actions by explaining that they converted Ethereum brought over through bridges into ZKAS tokens at a discounted price of $0.055 less. Additionally, they implemented a 15-month vesting period for these tokens. Nevertheless, this news sparked significant backlash from the crypto community.
Vitalik Buterin Criticizes Misuse of Crypto Buzzwords
A well-known investigator in the cryptocurrency world, ZachXBT, revealed some questionable history about Ildar Elham, the founder of ZKasino. Elham is accused of failing to repay debts and avoiding bet settlements. Additionally, there are suspicions that he didn’t pay for an internal phishing attack. Cygaar, another crypto developer, noted that the ZKasino blockchain did not actually employ zero-knowledge technology as advertised. Instead, it was identified as an Arbitrum Nitro chain, allegedly created in just a couple of minutes.
Following the disclosures, numerous investors and crypto markets distanced themselves from ZKasino. MEXC, a leading digital asset exchange, removed the ZKAS token from its listings. The exchange had previously supported the platform during its Series A funding round.
Venture capital firm Big Brain openly announced that they consider the ZKasino app to be deceitful. They made their stance known by sharing that they hadn’t invested in it and would reject any future tokens from such projects. This statement is indicative of a larger industry trend aimed at mitigating risks associated with similar blockchain initiatives.
Vitalik Buterin’s criticism highlights the difficulties within the crypto world when it comes to understanding complex terms like “Zero-Knowledge.” He also emphasizes the importance of more transparency and engagement with blockchain projects. As regulators and the community work towards tighter controls, we can expect fewer instances of such events in the future.
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2024-04-25 00:06