ZKasino, a DeFi platform recently embroiled in controversy, has announced that it will return stolen funds to its investors at a 1:1 ratio.
The platform, which Dutch authorities recently charged for 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 several cryptocurrencies.
Skepticism remains high
Despite ZKasino’s commitment to refunds, investor confidence remains low. The lack of direct communication with the Dutch authorities and the sudden refund offer have raised several doubts among the community.
Chief among them is that the platform has given investors 72 hours to opt-in to the refund process. Skeptics argue that this short period could deter many from getting their deposits back and could be yet another scam designed to empty people’s wallets.
The platform’s blog post did not discuss the wagering rewards earned from user deposits. Onchain data indicates that following the end of the Bridge-to-Earn program, ZKasino converted investors’ ETH into Lido’s Wrapped Staked Ether.
Considering the current Lido staking yield of 3.3% and the recent rise in ETH prices, the staking rewards generated are estimated at over $100,000.
Several community members have wondered why the platform is asking them to go through a different process instead of just returning the Ethereum.
Others questioned the veracity of the blog and associated social media posts, asking how the Derivatives tweeted Monke about the payback from prison.
The Zkasino scam
The problems with ZKasino started in March when the platform launched the ‘Bridge-to-Earn’ program, promising rewards for temporarily blocking ETH.
However, when the redemption period arrived in April, ZKasino withheld approximately $30 million in deposits, leading to accusations of fraudulent activity from both investors and Dutch authorities.
ZKasino claims 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 keeping a close eye on whether ZKasino will deliver on its promises or if further complications will arise.