Crypto Casino Founder Richard Kim Arrested for Fraud After Losing $7M

Police took Richard Kim into custody this week. He started the cryptocurrency casino platform Zero Edge, which no longer exists. People claim he misused almost $7 million that investors gave him. Kim used to work as an executive at big financial companies like Galaxy Digital, Goldman Sachs, and JPMorgan. Now he faces charges of securities fraud and wire fraud.

Zero Edge Creator Gambled Away Millions Raised for Crypto Venture

The Southern District of New York oversees the case now. Court papers show Kim got a $250,000 secured bond. He gave $100,000 in cash or property to get out. Kim raised the money to build Zero Edge, a crypto casino. It promised fair and clear gameplay for users.

Kim did not use the money as planned. He wasted it on risky crypto trades and gambling. Reports say he put a big chunk of the $7 million into online gambling sites. One of these was Shuffle.com, an online sportsbook.

Kim’s crypto venture started to fall apart when he lost $80,000 to a phishing scam, according to reports. Kim admitted in interviews last year that this incident made him start a bunch of risky leveraged crypto trades. He was trying to get back what he lost, but it ended up using up most of the money from investors. Kim has tried to defend himself by saying he did not mean to cheat anyone. He explained his actions as coming from his gambling problem.

Despite his claims that he did not plan to steal the money, an FBI complaint shows that Kim lied to investors about how he spent their cash. Some of the funds ended up in his personal crypto accounts and on gambling websites. This went against what he had told investors about keeping personal and business money separate.

Once Trusted Finance Pro, Richard Kim, Now at Center of Crypto Fraud Scandal

Kim’s arrest is a big blow to the former top finance executive. Before he started Zero Edge in 2024, Kim had a good career in finance and law. He worked at Galaxy Digital, a big crypto investment company, and held high-up jobs in investment banking at JPMorgan and Goldman Sachs. His background made investors trust him, and now many of them have lost a lot of money.

Galaxy Digital, a key investor in Zero Edge, has shown surprise at Kim’s behavior. The company, with a modest stake in Zero Edge, alerted officials when it uncovered Kim’s mishandling of money.

Kim had presented Zero Edge as a game-changing venture to bring openness and equity to online betting, but the platform never got off the ground. Instead, the project’s downfall stands as a clear warning about the dangers that can pop up when there is a lack of openness and checks.

As the case moves forward, people expect more information to come out about how bad the money mishandling was.