Federal prosecutors charge Richard Kim, a former executive at top Wall Street firms and founder of a startup crypto casino, with defrauding investors out of millions. The government alleges Kim solicited over $7 million for his venture, Zero Edge, under false pretenses and then misappropriated the funds, losing most through high-risk trades and gambling.
Kim, previously with Galaxy Digital, Goldman Sachs, and JPMorgan Chase, was arrested Tuesday, according to court filings.
Complaint Details Alleged Crypto Casino Fraud
The accusations appear in a formal complaint filed in the Southern District of New York, charging Kim with wire fraud and securities fraud allegedly occurring between March and July 2024. The filing, sworn by an FBI agent, accuses Kim of “knowingly having devised and intending to devise a scheme and artifice to defraud” investors.
Zero Edge reportedly raised over $7 million, closing a seed round around June 20. Within days, authorities allege, the misappropriation began. The FBI stated Kim lost “nearly all” of the funds. Initial reports indicated Kim admitted losing at least $3.67 million shortly after funding closed; prosecutors later cited a figure closer to $4.3 million.
Kim attributed the losses to leveraged crypto trades during Bitcoin’s June decline, telling CoinDesk it was fueled by a long-standing gambling addiction and a “downward spiral.” He said that after receiving the funds, “something snapped. I felt compelled to make up for my missteps.”
A Fall From Prominence
Kim’s arrest contrasts sharply with his Wall Street and legal pedigree. Before founding Zero Edge – pitched as a crypto casino giving players even odds – he was a general partner at Galaxy Interactive. His resume also includes COO roles in trading divisions at Goldman Sachs and JPMorgan and work as an attorney at Cleary Gottlieb.
Galaxy Digital was an investor. A spokesperson shared in a July interview that Galaxy and others “reported his conduct to the authorities” upon learning of Kim’s actions, calling their own investment “immaterial.”
Kim said in that interview that he had proactively contacted the SEC, admitting his actions were “grossly negligent” but denying intent to steal.
Specific Counts and Status in Crypto Casino Case
The wire fraud charge involves using interstate communications to misappropriate funds. The securities fraud count alleges Kim used “manipulative and deceptive devices,” including untrue statements or omissions, related to securities.
The U.S. Attorney’s Office for the Southern District of New York is prosecuting. Court records indicate Kim was released on a $250,000 secured bond. Despite resigning from Zero Edge on July 2, Kim said he intended to repay investors.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
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