ZigZag drama unfolds on heels of fraud allegations

The zkSync decentralized exchange project, ZigZag, has accused the decentralized gambling platform ZKasino of fraud, claiming that the money used to build ZKasino was stolen from the ZigZag Treasury.

ZigZag founder Kedar Iyer called out ZKasino founders on X, saying: “They would claim they were taking money out to pay developers for building the ZigZag frontend, then use parts of the money to build out ZKasino.”

ZKasino founders, specifically Derivatives Monke, were responsible for the ZigZag fundraising, where $15 million was raised and went into addresses controlled by ZKasino founders.

“I never had control of that money, so it is possible more of that money was stolen or went into ZKasino than I was aware of,” said Iyer.

Iyer alleges that “market making” TerraUSD (UST) against his recommendation and leverage trading on FTX contributed to lost funds. 

Kedar further stated that he previously demanded recompensation for about $1 million, which went into funding ZKasino to no avail. Therefore, ZigZag token holders should attempt to get restitution on their own.

Moreover, he said that multiple former ZKasino employees and contractors had contacted him with claims that they hadn’t been paid for their work.

Iyer blamed the failure of ZigZag on Derivatives Monke’s “incompetence,” stating that he has been unable to develop ZigZag further because he ruined the fundraising and destroyed the project.

One ZigZag employee, by the username Feichi, defended Derivatives Monke, and clapped back at Iyer, saying he has “a lazy attitude towards work.”

Derivatives Monke also responded to the tweet, saying that Iyer was trying to blame them for ZigZag’s failure after seeing the success of ZKasino and Syncus, another platform he founded.