DeFi
ZKasino Resurfaces With Promises Of Return Of Investor Funds But Skepticism Abounds
ZKasino, a DeFi platform recently embroiled in controversy, announced that it would return stolen funds to its investors in a 1:1 ratio.
The platform, which Dutch authorities recently accused of stealing $30 million in user deposits, said in a statement blog post on May 28, investors will be able to recover their Ethereum (ETH) through a new “2-step backbridge process”.
The announcement comes after arrest of a 26-year-old Dutchman linked to ZKasino earlier in May over accusations of fraud, embezzlement and money laundering. The man is believed to be behind the pseudonymous ZKasino Developer X account called “Monke Derivatives.”
Dutch authorities have seized assets worth 11.4 million euros, including real estate, a luxury car and various cryptocurrencies.
Skepticism remains high
Despite ZKasino’s commitment to repayment, investor confidence remains low. The lack of direct communication with the Dutch authorities and the sudden offer of reimbursement raised several doubts within the community.
Chief among them is that the platform gave investors 72 hours to register for the redemption process. Skeptics say this brief period could prevent many people from getting their deposits back and could be another scam designed to empty people’s wallets.
The platform’s blog post does not discuss staking rewards earned through user deposits. Onchain records indicate that after the Bridge-to-Earn program ended, ZKasino converted investors’ ETH into Lido’s Wrapped Staked Ether.
Considering the current Lido staking yield of 3.3% and the recent ETH price rally, the staking rewards generated are estimated to be over $100,000.
Several community members wondered why the platform required them to follow another process instead of simply returning the Ethereum.
Others questioned the veracity of the blog and its social media posts, wondering how Derivatives Monke was tweeting about repayment from inside the prison grounds.
The Zkasino scam
The problems with ZKasino began in March when the platform launched the “Bridge-to-Earn” program, promising rewards for temporarily blocking ETH.
However, when the redemption period came in April, ZKasino withheld around $30 million in deposits, leading to allegations of fraudulent activity investors and Dutch authorities.
ZKasino maintains that it operates legitimately, but the combination of legal issues, investor skepticism, and the recent refund announcement has left many questions unanswered.
As the 72-hour deadline approaches, the crypto community is closely monitoring whether ZKasino will honor its promises or whether further complications will arise.