Vitalik Buterin Criticizes “ZK” Misuse in ZKasino Scandal

Vitalik Buterin recently addressed concerns about ZKasino’s fraudulent activities and misuse of the term “zero-knowledge.”

Vitalik Buterin, one of the co-founders of Ethereum, has addressed important concerns regarding ZKasino fraud. In addition to this, he addressed the improper application of the term “zero-knowledge” (ZK) in relation to a significant scam.

ZKasino Accused of Misusing Ethereum in Lido

The platform lost around 33 million dollars’ worth of Ethereum (ETH) due to fraudulent acts. Despite ZKasino’s assertions that it would provide blockchain gaming, the company did not live up to its claims.

On April 21, members of the community raised the alarm after seeing that a refund commitment had been removed on more than 10,500 bridged Ethereum that was being used for token farming.

Further investigation revealed that ZKasino had invested this money in Lido, an Ethereum mechanism for liquid staking. The ZKasino team asserts that they converted the bridging ETH into ZKAS tokens at a reduced rate of $0.055 and mandated a vesting time of 15 months for the purpose of defending themselves.

Vitalik Buterin Criticizes Misuse of Crypto Buzzwords

However, the cryptocurrency community welcomed this announcement with significant criticism. ZachXBT, a well-known crypto investigator, has revealed the infamous history of Ildar Elham, the founder of ZKasino.

Elham faced charges of defaulting on debts and avoiding bet payments. It’s also believed that Elham failed to pay for an internal phishing attack. Cygaar, an additional cryptocurrency developer, noted that the ZKasino blockchain does not utilize zero-knowledge technology.

He insisted that the ZKasino blockchain was merely an Arbitrum nitro chain, constructed in approximately two minutes. Following this disclosure, a significant number of cryptocurrency platforms and investors severed their ties with ZKasino.

MEXC, one of the top digital asset exchanges, has removed the ZKAS currency from its listing. It had previously provided support for the platform during its Series A investment.

Big Brain, a venture capital firm, has made the public aware that the ZKasino app is clear evidence of fraud. By stating that they did not invest and that they would not accept any tokens in the future, they made it quite obvious that they intended to maintain their position.

This proclamation is an example of a wider industry response that aims to mitigate risks associated with blockchain projects that are comparable to those being taken by other companies.

Vitalik Buterin’s criticism underscores the challenges the cryptocurrency industry faces due to the use of buzzwords like “zero-knowledge.” Another implication is that blockchain technology-related activities should receive more attention and transparency.

As a consequence of the joint efforts of the community and the regulatory authorities to enhance regulations, the occurrence of situations of this nature will become less frequent.