Richard Kim, the founder of the crypto casino Zero Edge, was arrested on Tuesday in connection with allegations of fraud. Authorities accuse him of misleading investors and misusing their funds, which were intended for his crypto gambling platform.
According to a complaint filed by the FBI in the Southern District of New York, Kim convinced investors to contribute millions toward the development of a transparent and innovative crypto casino. Instead of using the funds as promised, he reportedly lost nearly all of the $7 million raised through high-risk crypto trading and online gambling.
Kim, who boasts a background in prestigious financial institutions, had worked at Galaxy Digital, a crypto investment firm led by Michael Novogratz, and held senior trading roles at JPMorgan and Goldman Sachs. He also previously practiced law at the renowned firm Cleary Gottlieb. This impressive resume made investors believe that Kim would manage their funds prudently and responsibly.
However, his financial practices took a turn for the worse after he fell victim to a phishing scam that cost him $80,000. Kim later explained that this loss triggered a relapse into old gambling habits, leading him to make increasingly reckless investment decisions. In an interview last year, Kim admitted to losing at least $3.67 million in high-leverage crypto trades.
Despite claiming his actions were born out of negligence rather than fraudulent intent, the FBI contends that Kim intentionally misled investors about the use of their funds. It is alleged that he transferred money to gambling platforms such as Shuffle.com and used it for personal crypto trading. The promised crypto casino, Zero Edge, never materialized.
Kim now faces charges of securities fraud and wire fraud. He has been released on a $250,000 bond, with $100,000 of that amount secured in cash or property. Galaxy Digital, one of the investors in the project, reported Kim’s actions to authorities after discovering his misconduct.
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