Zero Edge Founder Kim Facing DOJ Fraud Charges
Posted on: August 14, 2025, 11:30h.
Last updated on: August 14, 2025, 11:49h.
- Internet casino founder allegedly gambled away investors’ money
- He wagered on Shuffle and lost investors’ cash on various crypto exchanges
Richard Kim, the founder of cryptocurrency casino Zero Edge, is facing securities and wire fraud charges brought by the Department of Justice (DOJ) for allegedly duping investors out of nearly $3.8 million following a 2024 funding round of $4.3 million.
On Wednesday, United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the FBI, Christopher G. Raia, unsealed an indictment against Kim. The move arrived about three months after the Securities and Exchange Commission (SEC) charged the entrepreneur with fraud.
As alleged, 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,” said US Attorney Jay Clayton in a statement. “Founders who abuse the trust of their investors threaten the integrity of our important and uniquely American venture capital market.”
Prior to starting Zero Edge in March 2024, Kim was an executive at JPMorgan and Goldman Sachs — a pedigree that may have made investors comfortable with allocating capital to his startup iGaming enterprise.
Kim Has Gambling Problem, Squandered Investor Funds
In a July 2024 Substack post, Kim, 39, acknowledged he struggled with gambling issues for more than 20 years. The DOJ claims that shortly after Zero Edge raised $4.3 million in seed financing last year, Kim diverted approximately $3.8 million to another internet casino and various cryptocurrency exchanges.
The Justice Department notes that $3.8 million was transferred to Kim’s personal Coinbase account. From there, it was moved to other cryptocurrency exchanges, including Backpack, Binance, and Kraken. Between June 21 and June 27, 2024, Kim made transfers totaling $7 million (net $1 million) to various digital currency exchanges and to Shuffle.com, which advertises itself as a “VIP Crypto Casino and Sportsbook.”
Kim also admitted his misdeeds, saying that his sour cryptocurrency trades “triggered old demons.” However, the DOJ believes he wasn’t as forthright about the losses as he purported to be.
“Even as KIM admitted to some investors that he had misappropriated funds, he continued to conceal the true nature of his conduct, telling investors that he had lost the money as a result of a ‘treasury management strategy’ rather than personal gambling,” according to the agency.
If not for Kim’s malfeasance, Zero Edge may have been successful because cryptocurrency casinos have swelled in popularity in recent years. Additionally, Zero Edge’s model may have been attractive to bettors because true to its name, the operator aimed to eliminate the house edge on popular games such as blackjack and roulette.
Kim Could Be Facing Hard Time
Kim admitted to the FBI he “was clearly wrong from the beginning” and his actions were “completely unjustifiable,” but he could still be facing significant time behind bars. He’s charged with one count of securities fraud and one count of wire fraud, with each carrying a maximum sentence of 20 years.
The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge,” according to the Justice Department.
One of the investors whose capital Kim pilfered was Galaxy Digital, a cryptobanking entity controlled by Mike Novogratz. Galaxy said last year its losses in the Zero Edge controversy were small.
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