Richard Kim, the founder of the crypto casino Zero Edge, was arrested on Tuesday in connection with fraud charges, after allegedly misusing millions of dollars in investor funds.
The FBI’s complaint, filed in the Southern District of New York, accuses Kim of deceiving investors into contributing money to his company, claiming he would create a revolutionary crypto casino offering transparent and fair gaming. However, instead of investing the funds into the business as promised, Kim allegedly lost nearly all of the $7 million raised through risky crypto trades and online gambling.
Kim, whose resume includes roles at prominent financial institutions like Galaxy Digital, JPMorgan, Goldman Sachs, and Cleary Gottlieb, was seen as a trusted figure by investors. His background in finance and law led many to believe he would handle their investments with integrity. However, his professional career took a dramatic turn after he became the victim of a phishing scam that cost him $80,000. Kim claimed that this financial setback reignited a long-standing gambling addiction, leading him to take high-risk actions with the funds.
In previous interviews, Kim admitted to losing at least $3.67 million through high-leverage crypto trades, further exacerbating the situation. He later reached out to the U.S. Securities and Exchange Commission (SEC) to confess his actions, stating that although his behavior was reckless, he did not intend to defraud anyone or run off with the money.
Despite his claims, the FBI contends that Kim misled investors regarding the use of their funds. Investigators allege that he diverted money to gambling sites, including Shuffle.com, and engaged in personal crypto trading. Kim’s planned crypto casino, Zero Edge, never materialized.
Kim now faces serious charges, including securities fraud and wire fraud. He was released on a $250,000 bond, with $100,000 in cash or property required. Galaxy Digital, one of the investors in the venture, stated that they were unaware of Kim’s actions at the time of the investment and reported him upon discovering the fraud.
Related topics:
Suspicious Price Movements Trigger Market Manipulation Concerns for Story IP
Coinbase CLO Criticizes FDIC for Delaying FOIA Compliance in Ongoing Lawsuit
TRON’s Justin Sun Doubles Down on $500M Embezzlement Accusations Against First Digital Trust
