ZK Casino Initiates Partial Refunds in $33 Million Rug Pull Saga

ZK Casino has reemerged with a significant update on partial repayments following months of inactivity in the wake of a $33 million rug pull scandal. The project's anonymous founder, Derivatives Monke, disclosed on X on November 9, 2025, that roughly 35% of addresses that bridged Ethereum (ETH) to the platform have now received refunds, distributed on either zkSync Lite or zkSync Era networks.

Approximately 2,500 out of 8,000 affected addresses have been processed, and the founder indicated that an additional 40% of refunds are slated for completion next week, which could raise the total to about 75%. Refund amounts are still being fine-tuned, with some users potentially receiving extra interest based on final calculations. For larger withdrawals, identity verification will be mandatory due to legal obligations.

The controversy began in April 2024 when ZK Casino launched, enticing users with promises of bridging ETH to its layer-2 chain, earning yield, and allowing ETH withdrawals at any time. Instead, the project converted user deposits into vested ZKAS tokens and staked the ETH on Lido, leading to estimated losses of $33 million for over 10,000 users.

The incident drew widespread condemnation, including from Ethereum co-founder Vitalik Buterin, who challenged the project's claims of using zero-knowledge technology. On-chain investigations later connected the team to prior fraudulent schemes, and Dutch authorities made several arrests during the initial investigation, though only a minor portion of funds was recovered at that stage.

While the current refund efforts provide some respite, full recovery remains ambiguous. The founder noted collaboration with various entities to finalize remaining payouts, but timelines are unstable, hinging on liquidity, legal pressures, and the management of residual on-chain assets. Affected users continue to express doubt, citing prolonged delays and the absence of independent oversight.