Federal prosecutors in New York have indicted Richard Kim, the former chief executive officer of Zero Edge Corporation, on allegations that he diverted millions in startup funding into personal cryptocurrency trading and online gambling. According to court documents, Kim, 39, is charged with one count of securities fraud and one count of wire fraud, each carrying a potential sentence of up to 20 years in prison if convicted.

Federal Indictment Targets Former Crypto Casino Executive

U.S. Attorney Jay Clayton stated, “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.” According to Department of Justice, FBI Assistant Director Christopher G. Raia added that Kim “allegedly hedged his bets that false assurances would induce more investments and conceal the true nature of his spending.”

Kim, a former executive at JPMorgan, Goldman Sachs, and Galaxy Digital, is accused of misleading investors about how their money would be used while soliciting funding for his crypto-powered gaming platform.

Zero Edge, launched in early 2024 with plans to offer blockchain-based casino games such as craps, roulette, baccarat, and blackjack, secured about $4.3 million in seed funding in June of that year. Prosecutors allege that within days, Kim diverted approximately $3.8 million of that sum to a personal cryptocurrency account at Coinbase before moving about $1 million to other exchanges, including Binance, Kraken, and Backpack.

Between June 21 and June 27, 2024, Kim allegedly transferred roughly $7 million—resulting in net transfers of $1 million—to a personal account at Shuffle.com, an online platform describing itself as a “VIP Crypto Casino and Sportsbook.” Additional funds, including $450,000 to unidentified cryptocurrency wallets and $145,000 to a personal checking account, were also allegedly redirected.

By June 29, just over a week after the funding round closed, Kim reportedly told some investors via email that he was “solely responsible for the loss of $3.67m of the Company’s balance sheet” due to “leveraged trading losses from seed round financing proceeds.” Other investors were told the losses were part of a “treasury management strategy,” a description prosecutors claim was an attempt to obscure the gambling activity.

Admission, Fallout, and Company Collapse

Kim has admitted to both investors and federal agents that his actions were “clearly wrong from the beginning” and “completely unjustifiable.” In interviews, he described an $80,000 phishing scam loss as the trigger for a “negative spiral of leverage trading, raising more capital, and hiding the truth.” He resigned from Zero Edge on July 2, 2024, following requests from the board, and the company entered voluntary liquidation by the year’s end without ever launching its platform.

Galaxy Digital, where Kim was previously a venture fund investor, confirmed that it had made an “immaterial balance-sheet investment” in Zero Edge and joined other backers in reporting his conduct to authorities. The U.S. Securities and Exchange Commission also brought civil charges in May 2025, alleging that Kim misappropriated investor funds “minutes” after receiving them.

Despite the criminal and civil proceedings, Kim has publicly expressed his intention to repay investors and continue pursuing his original blockchain casino concept, though he disputes the decision to wind down the company. In a written statement, he told investors, “You didn’t just back a project; you invested in my vision, my potential. I will continue building because the world desperately needs what we started.”