Crypto gambling project ZKasino has announced a ‘two-step bridge back process’ for users to finally withdraw their share of what was branded, at the time, as a $33 million rug pull.

However, users have only been given a 72-hour window (that’s until 2pm UTC on May 31) in which to ‘sign up’ to withdraw their funds, which are now worth over $40 million in total.

Read more: ZKasino $30M ‘favor’ to users — seamless transition or rug pull?

The original incident was sparked by an April 20 announcement that ETH deposits made as part of a bridge-to-earn rewards program would be converted into the project’s own ZKAS token, as a “favor” to users.

Despite previous assurances that the deposits would be available to withdraw 1:1, the 10,515 ETH had instead been transferred into a multisig address controlled by the team. Nine days later, the funds were sent to three wallets in the form of Lido’s wrapped staked Ether token (wstETH).

The decision to enable users to withdraw their funds comes almost a month after Dutch authorities announced the arrest of “a 26-year-old man who is suspected of fraud, embezzlement, and money laundering” in connection with ZKasino, as well as seizing over €11.4 million ($12.4 million) worth of “various assets.”

The involvement of law enforcement seemingly had an effect on the team, as the funds were returned to the project’s multisig on May 9.

The same day, ZKasino’s pseudonymous Derivatives Monke took to X (formerly Twitter) to “strongly reject” the claims of a rug pull as “completely false and damaging to the ZKasino brand.”

The post points out that the “ETH is safe and secured by ZKasino in the ZKasino Multisig,” but makes no mention of why it had been removed in the meantime.

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The post ZKasino gives users until Friday to claim back ‘rugged’ funds appeared first on Protos.

Following a month-long ‘bridge-to-earn’ program, crypto gambling platform ZKasino launched its own network on Saturday. However, the announcement included a nasty surprise.

In what ZKasino referred to as a ‘seamless transition,’ users were informed that “All bridged Ethereum has been converted to our native gas token, ZKAS… as a favor to our users.”

Not only was the 10,505 ETH, (worth $33 million at the time of writing) converted to the project’s own token without forewarning, but the tokens themselves would not be available to users right away. “Keep in mind that the majority of ZKAS is vested over 15 months, only 5% is distributed out immediately.”

The ‘bridged’ ETH was sent to a multisig address controlled by the team. The sum was then deposited into Lido a few minutes later where it earns over $1 million per year, given the current staking yield of 3.2%.

The move has been branded by much of the crypto community as a ‘rug pull,’ especially given the multiple previous assurances that the funds would be accessible for withdrawal once the new network went live.

The site’s bridge webpage (now offline) previously stated that once the chain was live, funds would be ‘returned and can be bridged back.’ Deleted tweets and audio clips confirm the same.

Communication breakdown

On Friday evening, a user asked why the website’s promise to return ETH had been removed in the ZKasino Telegram group. The chat went ‘on lock’ shortly afterwards, with the simple explanation of ‘No moderator available.’

The following morning, the use of Chinese in the chat was banned — purportedly because people were hiring hitmen — before the moderator gave up completely: “No point even unlocking the chat,” they wrote.

ZachXBT raised concerns over the ZKasino team late last year, labeling them ‘proven bad actors.’

Read more: Crypto security firms more concerned with social media clout than the details

Others pointed out that the project has nothing to do with the various buzzwords that it uses to market itself, such as ‘zk’ (zero-knowledge) technology and ‘EigenDA’ (for data availability). The underlying ‘ZKasino chain’ is instead an ‘an Arbitrum Nitro chain that took two minutes to deploy.’

The project’s ‘pre-audit’ was conducted by ChatGPT ahead of a full audit by Certik.

In the wake of the backlash, VC firms have distanced themselves from the team, who avoided engaging directly with criticism, preferring to post a standard marketing tweet that only tangentially refers to ‘noise and FUD.’

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The post ZKasino $30M ‘favor’ to users — seamless transition or rug pull? appeared first on Protos.