Big Brain says it never invested in ZKasino following scam allegations

Companies • April 22, 2024, 2:22AM EDT

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Quick Take

Big Brain Holdings said it never invested in ZKasino even though it was previously named as one of the investors.
ZKasino had announced a $26 million Series A funding round from investors including Big Brain and MEXC exchange.

Crypto venture capital firm Big Brain Holdings said it never invested in the decentralized gambling network ZKasino, a project that has allegedly scammed investors at its launch over the weekend.

ZKasino had previously announced a $26 million Series A round naming investors including Big Brain and MEXC exchange in a now-deleted post. Big Brain Holdings claimed it received a token distribution offer from ZKasino that it will not opt to receive.

“We have never invested in ZKasino but were offered a pro-rata token distribution that we have not received and will not opt to receive,” the Big Brain team wrote on X on Sunday. The team further added that the VC had invested in ZigZag exchange, founders of which had gone on to join ZKasino.

ZKasino users had bridged over $33 million in ether on the gambling platform with aims to earn bonus native ZKAS token at launch. The project promised users that the bridged ether could be returned at users’ request.

However, investors later discovered to their dismay that ZKasino had changed its plan in a way that users’ ether was automatically vested into ZKAS tokens instead of being redeemed at users’ will. The project had said that the change was made to ensure a “seamless transition and a superior user experience.”

Nevertheless, ZKasino proceeded to launch itself. Its launch announcement on X currently has over 9,300 replies, many of which are from its investors demanding that their funds be given back immediately.

Several allegations of fraudulent actions by the ZKasino team have already been raised by its former colleagues at ZigZag and blockchain sleuth ZachXBT, which included claims that the ZKasino team had stolen money, avoided paying contractors, and “giveaway” event winners.

The crypto community on X expressed skepticism toward Big Brain’s clarification regarding ZKasino. Several users replied to Big Brain’s announcement asking why the team did not clarify its stance prior to the project’s alleged fraud.

“They have been claiming since long that you’ve invested and you only figured now to clear it up with all the people after the team scammed? Something doesn’t add up,” wrote a commentator on X.

"Why didn’t you say anything when they used your name repeatedly and claim on Twitter that you’d invested?," a user enquired.

ZKasino and Big Brain did not respond immediately to The Block's request for further comments.

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About Author

Danny Park is an East Asia reporter at The Block writing on topics including Web3 developments and crypto regulations in the region. He was formerly a reporter at Forkast.News, where he actively covered the downfall of Terra-Luna and FTX. Based in Seoul, Danny has previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor of Journalism and Business Marketing from the University of Hong Kong.