The former executive of Galaxy, Goldman Sachs, and JP Morgan, who founded the crypto casino Zero Edge, raised over US$7 million from investors, promising to launch a social casino on the blockchain with virtual currencies and real winnings, after which he lost almost all the money.
After being accused of gambling away almost all the investors’ money, Richard Kim, the creator of the cryptocurrency casino Zero Edge, was taken into custody. He deceitfully persuaded investors to participate in Zero Edge, a cryptocurrency technology business he formed, and then embezzled millions of dollars from those investors, pursuant to an FBI lawsuit filed in the Southern District of New York.
The FBI accused Kim of wire fraud and securities fraud, claiming he lost almost all the $7 million he had obtained from investors. Kim posted a US$250,000 secured bond and pledged US$100,000 in cash or real property to secure it, according to court documents.
The Zero Edge issue was first covered by CoinDesk in July of last year. Kim disclosed in an interview at the time that he had lost over US$3.67 million of the money invested by his investors in a string of risky, leveraged cryptocurrency deals.
Kim’s own memory of what went wrong, which he shared with CoinDesk in a written letter that he later issued as a public apology, stated that the downfall started with a thoughtless error — a phishing site that cost $80,000. He went into a downward spiral of concealing the truth, raising more money, and engaging in leveraged trading.
Kim told CoinDesk that he reported himself to the public tip line of the U.S. Securities and Exchange Commission after losing the majority of the US$7 million he had raised for Zero Edge.
Kim’s arrest represents a dramatic decline in popularity. Due to the actions of its former executive, Galaxy was one of the investors in Zero Edge that suffered financial losses. In March 2024, Kim left Galaxy to form Zero Edge, a business in which Galaxy had a negligible balance-sheet stake. Kim marketed Zero Edge as the first cryptocurrency casino of its sort that would level the playing field for players by increasing transparency.
Kim told CoinDesk last year that he was inspired to create Zero Edge despite its failure to debut because of his past struggles with gambling addiction and his dissatisfaction with the house’s often unfair and hidden advantage over players.
