DeFi
Disgraced project ZKasino says it will return deposits – but investors only have 72 hours – DL News
- ZKasino has proposed allowing investors to recover their Ether deposits.
- The move comes after Dutch police arrested a man in connection with ZKasino on May 3.
Cryptocurrency gaming platform ZKasino, accused by Dutch authorities of disappearing with some $30 million in user deposits last month, says investors can apply to get their funds back.
“We are now launching the 2-step bridging process in which bridgers can register and return their ETH in a 1:1 ratio,” ZKasino said in a May 28 statement. blog post.
The move comes after Dutch police arrested a 26-year-old man on May 3 on suspicion of fraud, embezzlement and money laundering in connection with ZKasino.
Dutch authorities also said they had seized various assets worth €11.4 million, including real estate, a luxury car and various cryptocurrencies.
This sudden change of heart, coupled with the lack of communication with Dutch authorities, led many to question whether the offer was legitimate.
“They can return all of our ETH without playing these games,” Mick1794, an investor in ZKasino, said in the telegram from the legal working group of ZKasino, a messaging app.
Additionally, ZKasino said investors only have 72 hours to register.
“After three days, the registration option is closed and deposits are stopped,” the ZKasino post said.
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This relatively short period of time for investors to register to get their funds back could mean that many who thought their funds were gone will not benefit.
In March, ZKasino and its founders announced a program called Bridge-to-Earn, offering users the ability to temporarily lock their Ether to earn rewards.
But when it came time to redeem a month later, ZKasino suddenly changed the rules and kept some $30 million in deposits.
Investors and Dutch authorities accused ZKasino of absconding with the funds.
Fraud allegations
Although Dutch authorities claim that ZKasino is a scam, the project has always maintained that it is legitimate.
“We have started the process for bridgers to return their ETH for those who choose not to be part of the ZKAS conversion,” ZKasino said in its blog, without acknowledging the accusations.
Those who have topped up Ether under ZKasino’s Bridge-to-Earn program can now deposit the ZKAS tokens they received in exchange to get their Ether deposits back.
“Registration loses the remaining 14 months of ZKAS release,” the message said.
However, the post makes no mention of the Ether staking rewards that ZKasino has earned on user deposits.
Onchain records show that ZKasino converted investors’ Ether to Lido’s Wrapped Staked Ether shortly after the Bridge-to-Earn program ended on April 20.
At Lido’s current staking yield of 3.3%, combined with Ether’s recent rally, ZKasino’s accumulated staking rewards are worth over $100,000.
Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.