ZKasino resurfaces with promises of returning investor funds but skepticism abounds

ZKasino, a DeFi platform recently embroiled in controversy, announced that it will return stolen funds to its investors at a 1:1 ratio.

The platform, which Dutch authorities recently charged with stealing $30 million in user deposits, stated in a blog post on May 28 that investors can reclaim their Ethereum (ETH) through a newly introduced “2-step backbridge process.”

The announcement comes after the arrest of a 26-year-old Dutch man linked to ZKasino earlier in May on charges including fraud, embezzlement, and money laundering. The man is reportedly behind the pseudonymous ZKasino developer X account called “Derivatives Monke.”

Dutch authorities have seized assets worth €11.4 million, including real estate, a luxury car, and various cryptocurrencies.

Skepticism remains high

Despite ZKasino’s commitment to refunds, investor confidence remains low. The lack of direct communication with Dutch authorities and the sudden refund offer have raised several doubts in the community.

Chief among them is that the platform has given investors a 72-hour window to sign up for the refund process. Skeptics argue that this brief period may prevent many from recovering their deposits and could be another scam meant to drain people’s wallets.

The platform’s blog post did not address the staking rewards earned from user deposits. Onchain records indicate that following the end of the Bridge-to-Earn program, ZKasino converted investors’ ETH into Lido’s Wrapped Staked Ether.

Given the current Lido staking yield of 3.3% and the recent rally in ETH prices, the staking rewards generated are estimated to be over $100,000.

Several community members have questioned why the platform is asking them to go through another process instead of just returning the Ethereum.

Others questioned the veracity of the blog and its associated social media posts, asking how the Derivatives Monke was tweeting about the refund from the confines of jail.

The Zkasino scam

The issues with ZKasino began in March when the platform launched the “Bridge-to-Earn” program, promising rewards for temporarily locking up ETH.

However, when the redemption period arrived in April, ZKasino withheld approximately $30 million in deposits, leading to allegations of fraudulent activity from both 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 if further complications will arise.