Founder of Crypto Casino Admits to Misusing Investor Funds, Resigns

The founder of an up-and-coming crypto casino that seeks to deliver customers odds equal to the ones with the house, reportedly admitted to gambling away a solid sum belonging to investors. The case involves the crypto casino platform, Zero Edge and its founder, Richard Kim.

Besides the founder of Zero Edge, Kim was formerly a part of the C-suite at Galaxy Interactive, a leading gaming company that is led by Michael Novogratz. Additionally, the exec was formerly a part of Goldman Sachs and JP Morgan. Kim’s professional tenure includes a role with the recognizable law firm, Cleary Gottlieb.

Recently, Kim was asked to resign by Zero Edge’s board of directors. His resignation became a fact as of July 2. With that in mind, an internal email communication, released recently by CoinDesk, shed some light on the reason behind Kim’s resignation.

Last month, on June 20, Zero Edge completed a seed financing round. However, starting from the next day after the seed round, Kim “had begun placing leveraged positions on some cryptocurrencies, resulting, over the course of the next several days, in the significant loss of company funds,” per the email communication released by the publication.

Near the end of the month, the executive reportedly informed the company’s board of directors about the losses. The recently released email suggested that the losses amounted to approximately $3.67 million. What’s more, Kim was allegedly the only person who was responsible for the aforementioned loss.

A Careless Mistake Results in the Loss of Millions

Further details regarding the case were disclosed in a Substack post. Kim explained what led to his downfall, pointing to a “careless mistake” with a phishing site that cost him $80,000. The executive said that this mistake “triggered my old demons,” admitting that he chased his losses.

Speaking about the time after the fund seed closing, Kim said that “something snapped.” Zero Edge’s founder wrote: “I felt compelled to make up for my missteps. Within days, millions were in leveraged longs, and starting from the fall in bitcoin from $64k to $58k and extending into the following days, the treasury took a substantial hit.”

In light of the losses, Kim said he admitted in front of his partner and the company investors. He resigned immediately after that and said that he was paralyzed by fear and the need to preserve his reputation, which is why he didn’t disclose this sooner.

Regretting his actions, Kim reported himself to the US Securities and Exchange Commission. Although he admitted to losing the money, in a “grossly negligent” act, he wanted to say that he didn’t plan to run away with the funds.