Richard Kim, the founder of the cryptocurrency casino startup Zero Edge and former executive at Galaxy Digital, Goldman Sachs, and JPMorgan Chase, was arrested on April 15, 2025, facing serious charges of securities fraud and wire fraud. Authorities accuse Kim of diverting nearly all of the $7 million raised from investors into personal gambling and high-risk cryptocurrency trades, rather than safeguarding the funds as promised.
According to an FBI complaint filed in the Southern District of New York, Kim allegedly misled investors by falsely representing how their money would be used. Instead of deploying the capital to develop Zero Edge, a crypto-based online casino platform, he transferred significant portions to personal crypto accounts and gambling sites, including the online sportsbook Shuffle.com. Initial reports indicate Kim lost approximately $3.8 to $4.3 million of the funds through leveraged crypto trades during Bitcoin’s market downturn and personal gambling, which he attributed to a longstanding gambling addiction and a downward spiral triggered by a phishing scam that initially cost him $80,000.
Before his arrest, Kim reportedly self-reported his misconduct to the U.S. Securities and Exchange Commission (SEC), expressing remorse and denying any intent to abscond with the funds. Despite this, several investors, including Galaxy Digital—which had a minor stake in Zero Edge—alerted law enforcement upon discovering his actions, prompting swift legal intervention.
Kim’s fall from grace is notable given his prestigious background, which includes senior roles in major financial institutions and legal practice at Cleary Gottlieb. He resigned from Zero Edge in July 2024 and has expressed intentions to repay investors, though he now faces prosecution by the U.S. Attorney’s Office for the Southern District of New York. Court records show Kim was released on a $250,000 secured bond with $100,000 in cash or real estate as collateral.
This case underscores the risks inherent in the crypto startup space, especially in high-risk sectors like crypto gambling. It highlights the critical need for investor vigilance, transparency, and regulatory oversight to prevent similar breaches of trust in the future.
