The cryptocurrency industry has been rocked by a major scandal involving ZKasino, a Blockchain-based gambling platform accused of fraud and misuse of technology. The controversy, which is estimated to have cost users around $33 million, highlights the dangers of buzzwords in crypto and the need for greater caution within the community. Ethereum inventor Vitalik Buterin, in particular, expressed his anger towards the issue.
ZKasino incident: Promises broken
ZKasino promised a revolutionary online gambling experience built on blockchain technology. However, cryptokoin.com As we reported, alarm bells started ringing when users realized that the platform had deleted its promise to return more than 10,500 Ethereum (ETH) used in token farming. Investigations revealed that ZKasino transferred these funds to Lido, a liquid staking protocol.
The platform defended itself by claiming that they were offering a discounted rate for ETH in exchange for ZKAS tokens, which have a 15-month vesting period. However, this statement was met with heavy criticism from the crypto community. Further investigation revealed a disturbing pattern. Crypto detective ZachXBT has revealed that ZKasino founder Ildar Elham has a history of financial irresponsibility, including defaulted loans and unpaid gambling bets. Additionally, it was discovered that Elham may have been responsible for a phishing attack within the platform itself.
ZK technology was not used
Another critical detail emerged: ZKasino’s blockchain did not use zero-knowledge (ZK) technology as advertised. Experts such as Cygaar, a crypto developer, have pointed out that this is likely a basic Arbitrum Nitro chain that was quickly established. This revelation revealed that the platform was misusing a popular crypto term to attract investors.
Faced with mounting evidence, the crypto community and industry players have taken decisive action. Major exchange MEXC, which had previously supported ZKasino, delisted the ZKAS token, prioritizing user protection. Similarly, venture capital firm Big Brain accused the platform of fraud and denied any future involvement.
Ethereum inventor raised an alarm
The ZKasino scandal drew a harsh reaction from Ethereum’s co-founder Vitalik Buterin. Buterin criticized the platform’s use of the term “Zero-Knowledge” and highlighted the dangers of buzzwords becoming tools for scammers. He emphasized the need for greater scrutiny and transparency in the crypto space to prevent similar incidents in the future.
The ZCasino debacle is a stark reminder of the importance of due diligence in the crypto world. Investors should be wary of projects that capitalize on buzzwords that have no substance. Additionally, the industry needs to prioritize robust review procedures and promote open communication to quickly detect and address potential fraud. By working together, the crypto community can create a more secure and trustworthy environment for everyone involved.
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