![\"Neon](\"https:\/\/readwrite.com\/wp-content\/uploads\/2025\/08\/Crypto-casino-founder-accused-of-gambling-away-millions-from-investors-e1755158802656-300x169.jpg\")
<\/div>\nAn indictment has been unsealed in a case involving a crypto casino founder and his alleged gambling away of millions of investor funds.\u00a0The news comes from the desk of the United States Attorney for the Southern District of New York, Jay Clayton.<\/p>\n
Clayton is working alongside the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), Christopher G. Raia.<\/p>\n
They have laid charges at the door of the former founder and Chief Executive Officer of Zero Edge Corporation (Zero Edge), Richard Kim. U.S. District Judge Lorna G. Schofield will oversee the proceedings and outcome of the case.<\/p>\n
Kim indicted in crypto casino gambling case<\/span><\/h2>\nKim is being charged with masterminding a process to defraud investors of Zero Edge by the authorities and the Securities and Exchange Commission (SEC) as part of the Securities and Exchange Commission v. Richard T. Kim, No. 1:25-cv-03796 (S.D.N.Y. filed May 7, 2025<\/a>).<\/p>\nThese charges include \u201cmaking false and misleading statements regarding the use of investor funds and subsequently misappropriating those funds,\u201d according to the DOJ report<\/a>.<\/p>\nThese serious charges of securities fraud and one count of wire fraud each carry a maximum sentence of 20 years in prison. Assistant U.S. Attorney Ryan T. Nees will prosecute the case, and the filing of the case will be handled by the Office\u2019s Securities and Commodities Fraud Task Force.<\/p>\n
Kim\u2019s alleged misconduct<\/span><\/h2>\nZero Edge was founded by Kim in 2004 with the view to utilizing blockchain and cryptocurrencies to fuel a casino app. It is reported that Kim made assurances to potential investors that the app would be developed with their investment.<\/p>\n
The DOJ\u2019s information and subsequent charges say that Kim did otherwise with the proceeds of his funding rounds. Instead of developing \u201con-chain\u201d games such as craps and potentially bacarat, blackjack, and roulette at a later stage, he is accused of mishandling these investments.<\/p>\n
The indictment documents<\/a> point the finger at Kim, saying he \u201cmisappropriated the proceeds of the company\u2019s seed round to make speculative cryptocurrency trades and gamble at an online casino.\u201d<\/p>\nZero Edge funding rounds<\/span><\/h2>\n![\"\"](\"https:\/\/readwrite.com\/wp-content\/uploads\/2025\/05\/richard-kim-sec.jpg\")
<\/p>\n
The DOJ reported that Kim and Zero Edge closed on approximately $4.3 million seed financing round from investors.<\/p>\n
Further to this, Kim is alleged to have \u201cdiverted approximately $3.8 million of investors\u2019 funds first into a personal cryptocurrency account held at Coinbase and then sent approximately $1 million on to a variety of other crypto exchanges, including Binance, Kraken, and Backpack.\u201d<\/p>\n
The indictment<\/a> goes further into the alleged deeds of Kim from June 21, 2024, to June 27, 2024. In this timeframe, Kim made transfers of $7 million and net transfers of $1 million, from \u201cCoinbase and Kraken to a personal account held at a casino and sportsbook website, Shuffle.\u201d<\/p>\nThe records presented by the DOJ show that Kim transferred approximately $450,000 to other cryptocurrency wallets with unknown owners and transferred an additional $145,000 from Kraken to a personal checking account.<\/p>\n
Emails show admission of guilt<\/span><\/h2>\nIn emails presented as part of the indictment, Kim contacted investors, saying he was \u201csolely responsible for the loss of $3.67m of the company\u2019s balance sheet.\u201d<\/p>\n
Despite this admission of guilt, he allegedly concealed the reason for the losses, saying it was not gambling losses<\/a>, it was part of \u201cleveraged trading losses from seed round financing proceeds\u201d and was a \u201ctreasury management strategy.\u201d<\/p>\nThe FBI reported that at the time of his arrest he declared that these actions were \u201cclearly wrong from the beginning\u201d and \u201ccompletely unjustifiable.\u201d<\/p>\n
Featured image credit: Ideogram.<\/em><\/p>\nThe post Crypto casino founder accused of gambling away millions from investors<\/a> appeared first on ReadWrite<\/a>.<\/p>\n
These charges include \u201cmaking false and misleading statements regarding the use of investor funds and subsequently misappropriating those funds,\u201d according to the DOJ report<\/a>.<\/p>\n These serious charges of securities fraud and one count of wire fraud each carry a maximum sentence of 20 years in prison. Assistant U.S. Attorney Ryan T. Nees will prosecute the case, and the filing of the case will be handled by the Office\u2019s Securities and Commodities Fraud Task Force.<\/p>\n Zero Edge was founded by Kim in 2004 with the view to utilizing blockchain and cryptocurrencies to fuel a casino app. It is reported that Kim made assurances to potential investors that the app would be developed with their investment.<\/p>\n The DOJ\u2019s information and subsequent charges say that Kim did otherwise with the proceeds of his funding rounds. Instead of developing \u201con-chain\u201d games such as craps and potentially bacarat, blackjack, and roulette at a later stage, he is accused of mishandling these investments.<\/p>\n The indictment documents<\/a> point the finger at Kim, saying he \u201cmisappropriated the proceeds of the company\u2019s seed round to make speculative cryptocurrency trades and gamble at an online casino.\u201d<\/p>\n The DOJ reported that Kim and Zero Edge closed on approximately $4.3 million seed financing round from investors.<\/p>\n Further to this, Kim is alleged to have \u201cdiverted approximately $3.8 million of investors\u2019 funds first into a personal cryptocurrency account held at Coinbase and then sent approximately $1 million on to a variety of other crypto exchanges, including Binance, Kraken, and Backpack.\u201d<\/p>\n The indictment<\/a> goes further into the alleged deeds of Kim from June 21, 2024, to June 27, 2024. In this timeframe, Kim made transfers of $7 million and net transfers of $1 million, from \u201cCoinbase and Kraken to a personal account held at a casino and sportsbook website, Shuffle.\u201d<\/p>\n The records presented by the DOJ show that Kim transferred approximately $450,000 to other cryptocurrency wallets with unknown owners and transferred an additional $145,000 from Kraken to a personal checking account.<\/p>\n In emails presented as part of the indictment, Kim contacted investors, saying he was \u201csolely responsible for the loss of $3.67m of the company\u2019s balance sheet.\u201d<\/p>\n Despite this admission of guilt, he allegedly concealed the reason for the losses, saying it was not gambling losses<\/a>, it was part of \u201cleveraged trading losses from seed round financing proceeds\u201d and was a \u201ctreasury management strategy.\u201d<\/p>\n The FBI reported that at the time of his arrest he declared that these actions were \u201cclearly wrong from the beginning\u201d and \u201ccompletely unjustifiable.\u201d<\/p>\n Featured image credit: Ideogram.<\/em><\/p>\n The post Crypto casino founder accused of gambling away millions from investors<\/a> appeared first on ReadWrite<\/a>.<\/p>\nKim\u2019s alleged misconduct<\/span><\/h2>\n
Zero Edge funding rounds<\/span><\/h2>\n
<\/p>\nEmails show admission of guilt<\/span><\/h2>\n