Federal Authorities Allege Tech Leader Illegally Used $3.67 Million in Initial Investment Funds for Gambling Purposes
Richard Kim, the founder and former CEO of Zero Edge Corporation, a crypto casino startup, has been charged with securities fraud and wire fraud for allegedly misappropriating about $3.8 million of the company's $4.3 million seed round funding.
According to the indictment unsealed in New York in 2025, Kim founded Zero Edge in March 2024, with an intent to create an app-based casino offering blockchain games like craps, roulette, and blackjack. However, instead of using the funds for the development of the promised casino app, Kim transferred millions to crypto exchanges and an online crypto casino named "Shuffle" where he gambled.
Evidence, including emails, shows that Kim admitted to losing $3.67 million of the invested funds. However, he misled investors by attributing the losses to a failed treasury management strategy rather than personal gambling addiction, which investigations revealed was a factor.
Kim, a former Wall Street banker with JPMorgan Chase and Goldman Sachs, was arrested in April 2025 and released on bail after posting $250,000. The U.S. Attorney for the Southern District of New York condemned his betrayal of investor trust as harmful to the venture capital market's integrity.
The U.S. Securities and Exchange Commission has also filed a parallel civil action as part of ongoing legal proceedings.
In the indictment, the USAO-SDNY claims that Kim ran a scheme to defraud investors by making false statements and misappropriating funds. If convicted, each charge Kim faces carries a maximum prison sentence of 20 years. The case of Richard Kim will be heard by US District Judge Lorna G. Schofield.
It is important to note that the allegations against Kim remain unproven, and he is presumed innocent until proven guilty.
The indictment unsealed in 2025 accuses Richard Kim, the founder of Zero Edge Corporation, a crypto casino startup, of using investor funds not for developing casino-and-gambling games as promised but for gambling in a crypto casino named "Shuffle". Despite loss admissions, Kim misrepresented the cause of the funds' disappearance, blaming it on a failed treasury management strategy instead of his gambling addiction, a factor uncovered by investigations. The U.S. Securities and Exchange Commission has initiated a civil action against Kim, who faces up to 20 years in prison if convicted for his alleged crimes under gambling-trends, crime-and-justice, and general-news headlines.
