ZK Casino begins partial repayments in long-running $33M rug pull case

ZK Casino has resurfaced with an unexpected update after months of silence surrounding its collapsed project.

ZK Casino is moving forward with slow, partial repayments in one of crypto’s most drawn-out collapse disputes. The update was shared by the project’s anonymous founder, known as Derivatives Monke, on X on Nov. 10.

The founder said about 35% of addresses that bridged Ethereum (ETH) to the platform have now received refunds on either zkSync Lite or zkSync Era, with more batches expected next week. The amounts are still being adjusted, and some users may receive added interest depending on how final balances are calculated. 

Larger withdrawals will require identity checks, which the founder said is due to legal requirements.

The scam that unfolded

ZK Casino launched in April 2024 with a pitch that users could bridge ETH into its layer-2 chain, earn yield, and withdraw their original ETH at any time. Instead of processing refunds, the project converted those deposits into vested ZKAS tokens and staked the ETH on Lido. 

More than 10,000 users were affected, and losses were estimated at around $33 million. The project drew heavy criticism from across the crypto community, including from Ethereum’s Vitalik Buterin, who disputed its claims that it used zero-knowledge technology at all.

On-chain researchers later connected the team to earlier scams, and Dutch authorities made multiple arrests during the initial fallout, though only a small share of funds was recovered at that time.

The refund process now

The current refund progress offers some relief, but it does not signal a full resolution. Only around one-third of users have received their funds so far, and the founder said the team is working with multiple parties to complete the remaining payouts. The update suggested that another 40% of refunds may be processed next week, which would bring total payouts to about 75% of all affected wallets.

However, the timeline remains uncertain, and final recoveries may depend on liquidity conditions, legal pressure, and how remaining on-chain assets are handled. Many affected users remain skeptical, noting the long delays and the lack of third-party oversight.