Investors create group to take legal action against ZKasino co-founders
Despite previous red flags, the project managed to gather a significant amount of funds through its token pre-sale.
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Investors created a Telegram called “ZKasino Legal Task Force” aiming to prosecute gambling blockchain infrastructure ZKasino co-founders after they swapped nearly $33 million in Ether (ETH) for their native token. After the swap, the co-founders went dark and their groups started banning users that suggested the possibility of an exit scam being executed, according to Rekt News.
However, the tension escalated quickly, with a few members venting about the possibility of hiring hitmen to go after the project’s co-founders.
The controversy started on March 23, when ZigZag Exchange founder Kedar Iyer made a post on X stating that ZKasino’s co-founder known as Monke used ZigZag’s funds to start ZKasino. As it was said in the same publication, Monke and two other co-founders were part of ZigZag’s team and signers from its treasury multi-signature wallet and allegedly stole funds to start their new venture.
Decentralized blockchain-native fundraising group BlackDragon added more information on an April 23 post, revealing they wanted to invest in ZKasino. However, the due diligence team at BlackDragon stated that the investment didn’t go through, as ZKasino team members didn’t react well about revealing themselves.
Regarding recent drama with @ZKasino_io who scammed their investors for $35M – we wanted to invest some months ago, but skipped due to ZKasino team going nuts while we were doing basic due dilligence to protect our members and investors.
Check the screenshots below between our… pic.twitter.com/q20HqOInvs— BlackDragon (@BlackDragon_io) April 23, 2024
In another post, the BlackDragon team explained that they tried to warn fellow venture capital funds and communities, but they still invested significant amounts in ZKasino.
The user who identifies himself as Cygaar also went to X to highlight that ZKasino’s native blockchain infrastructure doesn’t apply any zero-knowledge technology, contrary to what its team advertised. Instead, they deployed a blockchain based on Arbitrum Nitro’s structure which, according to Cygaar, takes two minutes to build.
Moreover, the current situation of ZKAS, ZKasino’s native token, is still uncertain. Investors who bought ZKAS during the pre-sale are yet to receive their tokens.
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