Zero Edge Founder Kim Charged by SEC in Crypto Casino Fraud

Posted on: May 9, 2025, 03:26h. 

Last updated on: May 9, 2025, 03:26h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • He lost an estimated $3.7 million in investor capital on betting, crypto trading
  • He previously admitted to problematic wagering habits

The Securities and Exchange Commission (SEC) formally charged the founder of a cryptocurrency casino with fraud after he squandered $3.77 million in investor capital on his own betting habit as well as crypto trades gone bad.

ZeroEdge
An image from the Zero Edge cryptocurrency casino. Disgraced founder Richard Kim is facing fraud charges from the SEC. (Image: Medium)

Richard Kim, the founder of cryptocurrency casino Zero Edge, is facing “permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer-and-director bar” from the SEC. Related to the commission’s action against Kim, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal complaint against him on April 15.

The SEC notes that in June 2024, within in minutes of receiving capital from investors, Kim moved that cash to personal betting and crypto investing accounts as well as a personal bank account.

He allegedly diverted more than $2.6 million of investor funds to his personal crypto asset futures trading account and lost nearly all of those funds trading crypto asset futures,” according to the SEC. “He also diverted more than $700,000 to his personal account on an online gambling platform, more than $240,000 to certain unknown crypto asset wallets, and more than $99,000 to his personal bank account.”

The commission states Kim’s actions resulted in the loss of “approximately $3.7 million of investor funds.”

Kim Confessed, but Zero Edge Never Came to Life

In a July 2024 Substack post, Kim acknowledged he had a more than two-decade battle with problematic betting habits, adding that he used Zero Edge investor cash to places leveraged trades on digital currencies. Leverage trades would have incurred steeper losses because such positions carry higher risk/reward profiles.

Kim also admitted his misdeeds, saying that his sour cryptocurrency trades “triggered old demons.” He also pointed out that he resigned immediately after the losses were brought to light and that he disclosed the bad trades to investors, but he said the situation wasn’t about comingling Zero Edge and his personal funds.

Zero Edge had raised more than $5 million in pre-initial coin offering (ICO) financing for its blockchain-based online casino on which customers would place bets with the Zerocoin (ZERO). Presumably, that would have acted as the moneymaker for the company had Kim executed on the vision he laid out to investors.

That didn’t happen and the gaming company is now in the midst of liquidation. In its corporate roadmap, Zero Edge also laid plans for poker and sports betting platforms, neither of which saw the light of day.

Zero Edge Could Have Been Unique Concept

Crypto casinos have boomed in popularity in recent years, providing an avenue for increased adoption and use of Bitcoin and other digital currencies. Alone, that momentum could have been a benefit to Zero Edge, but the company — had Kim ethically and properly executed the business plan — could have really been onto something.

Zero Edge derived its name from its proposed business model that would have featured no house edges on popular casino games, including blackjack, video poker, and many more.

Whether it’s a crypto, another internet casino, or traditional land-based gaming venue, the house edge is how operators make their money and why so many bettors say “the house always win.” Zero Edge wanted to flip that script by leveraging adoption of ZeroCoin, which would have driven the digital currency’s price higher, as its primary profit-generator.