ZKasino Under Fire: Rug Pull Allegations and Investor Concerns

• ZKasino faces fraud accusations from ZigZag Exchange.
• Users report an inability to withdraw funds creating rug pull fears in the community.
• Reputable exchange MEXC delays ZKasino token listing and withdrawal.

On April 4, 2024, a storm brewed within the cryptocurrency community as ZigZag Exchange, a decentralized platform, accused ZKasino of fraud. The accusations included diverting funds intended for development and misleading investors about funding sources.

These allegations gained support on April 18 when ZKasino seemingly removed a guarantee from its bridge interface, stating users could “bridge back” their Ethereum (ETH) deposits. This move gave concerns to investors especially considering the earlier accusations.

On April 20, the situation escalated. Users reported being unable to withdraw funds from ZKasino suggesting that it could be a rug pull scam,  where developers abandon a project after raising funds. Additionally, the official ZKasino Telegram group was shut down cutting down the communication between Zkasino investors.

Adding weight to the accusations, the cryptocurrency exchange MEXC, which had reportedly invested in ZKasino, announced a postponement of the ZKasino token (ZKAS) listing and withdrawal. This move by a supposedly reputable exchange raised questions about MEXC’s vetting process and potentially lent credence to the fraud claims against ZKasino.

As of April 22, 2024, ZKasino remains under scrutiny. Investors await further developments, while the accusations of fraud and the inability to withdraw funds paint a bleak picture for the project’s future. 

There are concerns that accusations of a rug pull scam could have far-reaching consequences for the DeFi space, and may underscore the urgency of implementing stricter regulations. Recently, the DeFi space was rocked by another similar incident involving Avi Eisenberg.
In this case, it is alleged that he manipulated the price of the Mango (MNGO) token, thereby enabling him to borrow all of Mango’s deposits against his position. The backers of Mango have accused the trader of illegally manipulating Mango Market’s futures contracts.