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26 May 2024
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Scam Alert: Crypto Betting Site ZKasino Rug Pulls, MEXC Dissociates Self

There are speculations that the decentralized gambling platform ZKasino may have played a fast one on its users through a rug pull.

ZKasino Makes Suspicious Moves

In March, the decentralized P2P order book exchange ZigZag levied some accusations against ZKasino. This accusation hinges on the inclusion of the alleged diversion of funds intended for project development to personal use. 

Furthermore, ZigZag stated that the crypto betting platform misled its users by lying about its funding. ZKasino also should have paid a number of the developers and contractors who worked on the platform, an obligation it did not fulfill.

“The initial money to build ZKasino was stolen from the ZigZag Treasury. The ZKasino founders are 3/5 signers on the ZigZag multisig so they were able to use the funds to fund their own activities…The $40 million ecosystem fund they announced isn’t real, and will likely never be paid out in any real currency,” ZigZag stated.

These allegations from ZigZag did not garner as much attention as was expected until ZKasino users voiced their concerns over the platform’s alleged removal of a prior commitment to return bridged Ethereum. In the meantime, it has not been ascertained if this is a rugpull or FUD ZKasino stated but it is worth noting that the incidence of scams is becoming more rampant in the crypto space.

Just like ZKasino, there have been other rug-pull incidents in recent times. A few days ago, Hong Kong authorities updated the number of suspects that have been nabbed in connection to the JPEX Exchange rug pull that happened last year. So far, up to 72 individuals including JPEX executives have been arrested. 

Overall, users of crypto platforms are advised to stay vigilant and also carry out due diligence before plunging funds into such projects.

MEXC and Other Investors Dissociates From ZKasino

Considering the gravity of the claims made against ZKasino and the effect it could have on those associated with the platform, some of these entities began to announce their non-involvement with the platform. 

MEXC, a crypto trading platform that participated in ZKasino’s Series A funding round at a valuation of $350 million explained to the public that it did not know about the rugpull. 

In addition, MEXC said it is only one of ZKasino’s investors who also fell victim to its tactics.

Another investor, Big Brain Holdings claimed to have invested in a Zigzag Exchange project back in 2022. The firm explained that its investment in Zigzag eventually led to a financial loss. While Big Brain’s investment was not directly in ZKasino, the firm acknowledged that most of the previous founders of the Zigzag project are now part of the ZKasino team, which appears to be fraudulent.

Big Brain Holdings also said that the only direct involvement it has had with ZKasino is an offer of a pro-rata token distribution which it is yet to receive. However, the firm has no plan to receive the token considering the turn of events. In the coming days, likely, more firms will likely publicly renounce their commitment to ZKasino.

The post Scam Alert: Crypto Betting Site ZKasino Rug Pulls, MEXC Dissociates Self appeared first on CoinGape.

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