ZK Casino, a blockchain-based gambling platform that stunned the crypto world with a $33 million rug pull, has re-emerged after months of silence, initiating partial repayments to defrauded users. As of early November, approximately 35% of affected addresses have received refunds, with the project’s anonymous founder, known online as Derivatives Monke, promising more repayments in the coming weeks.
According to the latest update, the reimbursements were distributed to users who initially bridged Ethereum (ETH) to the ZK Casino platform. Refunds are being sent via the zkSync Lite and zkSync Era networks, with the founder noting that balances are still under review. In some cases, users may receive additional interest based on how the final amounts are calculated.
However, the process is far from transparent or complete. While around 2,500 out of roughly 8,000 ETH depositors have seen some of their funds returned, two-thirds of victims are still left waiting. The founder has stated that larger refund requests will be subject to identity verification due to legal compliance requirements. This has raised concerns among users about privacy and trust, especially given the platform’s past.
ZK Casino originally launched in April 2024, presenting itself as a layer-2 Ethereum-based gambling platform where users could deposit ETH, earn yield, and withdraw at any time. However, shortly after its debut, the platform abruptly converted users’ ETH into vested ZKAS tokens and staked the deposits on Lido without user consent. The move was widely condemned as deceptive, with over 10,000 users affected and losses estimated at $33 million.
The backlash was swift and severe. Even Ethereum’s co-founder Vitalik Buterin criticized ZK Casino for misleading claims about using zero-knowledge technology. On-chain analysts later linked the project’s developers to previous crypto scams. The situation prompted law enforcement action in the Netherlands, resulting in several arrests. Despite this, only a small portion of the stolen funds was initially recovered.
The project’s reappearance with partial refunds has brought a glimmer of hope to some users, yet skepticism remains high. The founder has indicated that another 40% of wallets could be refunded in the near future, potentially bringing the total recovery rate to 75%. However, the timeline is vague, and there are no guarantees for full restitution.
Several users have voiced concerns over the lack of third-party oversight in the refund process. With no independent auditing of the repayments or access to detailed breakdowns, confidence in the platform’s intention to fully reimburse all affected parties remains low. Many worry that this partial repayment effort may be an attempt to avoid further legal scrutiny rather than a genuine effort at restitution.
The refund process could be influenced by several factors, including the availability of on-chain assets, regulatory pressure, and the project’s liquidity status. If the team is unable to liquidate enough assets or raise external funding, complete repayments may remain out of reach.
Beyond the immediate financial implications, the ZK Casino scandal has reignited debates over accountability in decentralized finance (DeFi). Critics argue that the lack of regulatory frameworks enables bad actors to exploit users with impunity. Others point out that the community itself bears some responsibility by engaging with unverified projects and failing to conduct due diligence.
To prevent similar incidents, industry experts are calling for stronger project vetting processes, better user education, and the development of decentralized arbitration mechanisms. Some have proposed on-chain insurance schemes that could automatically compensate users in the event of protocol failure or fraud.
The case has also exposed limitations in the current legal systems’ ability to respond quickly and effectively to cross-border crypto crimes. While Dutch authorities acted swiftly, arresting individuals linked to the scam, the complexities of tracing blockchain transactions and recovering digital assets mean that justice is often delayed or incomplete.
Meanwhile, other crypto projects have tried to use the ZK Casino saga as a cautionary tale. Several new platforms have begun implementing transparent treasury systems and community-controlled wallets to build user trust. These steps, while not foolproof, offer a way forward as the DeFi space matures.
With the broader crypto market still recovering from a series of high-profile collapses, including exchange failures and token crashes, the ZK Casino case serves as a stark reminder of the risks involved. For victims still awaiting reimbursement, the future remains uncertain. Whether the promised refunds will materialize — and whether the remaining funds can be recovered — is a question only time will answer.