Former Goldman and JPMorgan Executive Charged With $4 Million Crypto Casino Fraud After Rapid Gambling Losses

Ex-Goldman And JPMorgan Executive Faces Fraud Charges Over $4 Million Investor Losses

A former Wall Street executive now at the centre of a high-profile crypto case is facing serious allegations of defrauding investors after losing millions in a week-long gambling spree.

Richard Kim, 39, ex-CEO of Zero Edge, has been charged by federal prosecutors in New York with securities and wire fraud for allegedly diverting $3.8 million from his start-up’s seed funding for personal use.

How Did Millions Disappear So Quickly

Zero Edge, incorporated in April 2024 in the Cayman Islands, raised $4.3 million in seed funding by June of the same year, with investments coming from notable firms including Galaxy Digital, where Kim previously worked as a venture fund investor.

Court documents allege that within a single week after the funding round, Kim transferred the majority of the funds to his personal accounts and gambled much of it at Shuffle, a crypto-powered casino.

Kim reportedly informed one investor that only $710,000 remained in the company, attributing the losses to “day trading,” while other investors were told the depletion was part of a “treasury management strategy.”

Emails later revealed that Kim admitted being “solely responsible for the loss of $3.67 [million] of the Company’s balance sheet” following leveraged trading.

A History Of Financial Experience And Crypto Ventures

Before founding Zero Edge, Kim held senior roles in global trading at Goldman Sachs and JPMorgan and spent six years at Galaxy Digital.

According to a Galaxy spokesperson,

“Upon learning of certain actions taken by Mr. Kim in his role at Zero Edge, we, along with other investors, reported his conduct to the authorities.”

The U.S. Securities and Exchange Commission also filed fraud charges in May 2024, highlighting that Zero Edge never launched its planned blockchain-enabled gaming app and that Kim misused investor funds “minutes” after receiving them.

Confession And Gambling Addiction Revealed

Following his arrest on 15 April, Kim allegedly admitted to the FBI that he “knew what he did ‘was clearly wrong from the beginning’ and ‘completely unjustifiable.’”

He reportedly told the SEC he had been “grossly negligent” and that his losses were the result of a gambling addiction rather than fraudulent intent.

FBI Assistant Director Christopher Raia said,

“Kim allegedly hedged his bets that false assurances would induce more investments and conceal the true nature of his spending.”

Manhattan U.S. Attorney Jay Clayton added,

“Richard Kim misled investors by promising that he would build a blockchain-based casino gaming app, but ironically Kim turned around and gambled away the very funds he said he would use to build a better casino.”

Company Liquidation And Legal Proceedings

Zero Edge, which never launched its gaming platform, entered voluntary liquidation in December 2024.

Kim was released on a $250,000 bond after his arrest.

Prosecutors have repeatedly sought extensions to either secure a grand jury indictment or resolve the case with Kim’s defence team.

The latest indictment unsealed on Wednesday signals that no resolution has yet been reached.

The case has drawn attention for its unusual mix of traditional finance experience, cryptocurrency ventures, and rapid misappropriation of investor funds, highlighting the risks involved when large sums are placed in untested start-ups.