Former Zero Edge CEO Accused of Blowing $3.8M on Gambling

Former Zero Edge CEO Accused of Blowing $3.8 Million on Gambling

Written by Aaron S.,

Editor-In-Chief

Last Updated: August 14, 2025

Key Takeaways

Richard Kim took $3.8 million from a $4.3 million seed raise, with $1 million sent to his personal crypto casino account;
Investors got conflicting reasons for missing funds, but authorities allege the cash was spent on Kim’s personal activities;
The DOJ and SEC have charged Kim with fraud, claiming he diverted investor money within minutes of receiving it.

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The crypto casino startup Zero Edge has shut down, and its former leader is facing civil and criminal cases over how the company’s funding was spent.

Federal prosecutors in New York stated in an August 13 indictment that ex-CEO Richard Kim misused nearly all of the $4.3 million raised in the company’s seed round in June.

Court filings claimed that within a week of securing the funds, Kim had redirected about $3.8 million for personal purposes. This included roughly $1 million moved into his own account at Shuffle, a crypto-based gambling and sports betting site.

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Investors were reportedly given different explanations for why the funds had dropped. One backer was told that just $710,000 was left due to "day trading". Others heard that the losses came from a "treasury management strategy".

Authorities alleged these statements were meant to hide the fact that the money was being spent on Kim’s personal activities.

The Department of Justice has charged him with securities fraud and wire fraud. FBI Assistant Director Christopher Raia noted that Kim "hedged his bets" by providing misleading reassurances to attract more investment while hiding the truth.

After his arrest, Kim allegedly admitted to investigators that he was "clearly wrong from the beginning" and that his actions were "completely unjustifiable".

The US Securities and Exchange Commission (SEC) had already filed a fraud case in May. The agency claimed that Kim began diverting funds "minutes" after receiving them.

Recently, a ransomware group known as BlackSuit had its systems shut down and around $1 million in cryptocurrency taken by US and international authorities. How did the case unfold? Read the full story.