Richard Kim, a former executive at Goldman Sachs, JP Morgan, and Galaxy Digital, has been arrested on charges of securities fraud and wire fraud after allegedly misappropriating nearly $7 million in investor funds.
A Promising Start Ends in Allegations
Kim, who later founded a crypto-based casino platform called Zero Edge, is accused by the FBI of luring investors into the company under false pretenses and then gambling away their money. Court documents allege that Kim lost nearly all of the $7 million he raised—some of which was reportedly transferred to online gambling sites and personal trading accounts.
According to the FBI complaint filed in the Southern District of New York, Kim's communication with investors misrepresented how the funds were being used, leaving out critical details such as transfers to Shuffle.com, a gambling website.
The Spiral: Phishing, Leverage, and Addiction
Kim admitted in an earlier interview with CoinDesk that his downfall began when he fell for a phishing scam, losing $80,000. Trying to “make it back,” he embarked on a series of high-risk leveraged crypto trades—eventually losing $3.67 million of investor money.
“This triggered my old demons,” Kim said, referencing his history with gambling addiction. He described entering a spiral of secretive trading, raising more funds, and hiding the extent of his losses.
In an act of what he framed as accountability, Kim claimed he self-reported to the U.S. Securities and Exchange Commission (SEC). “I really messed up,” he said. “It was grossly negligent. But I didn’t intend to run away with the money.”
Elite Background, Sudden Collapse
Kim's arrest marks a dramatic fall from grace. Before launching Zero Edge, he led elite trading desks at Goldman Sachs and JPMorgan, served as a lawyer at Cleary Gottlieb, and worked at Galaxy Digital, where he departed in 2024 to pursue his new venture.
Galaxy confirmed that it had made a minor investment in Zero Edge and was among those who reported Kim’s actions to authorities after uncovering irregularities.
“Upon learning of certain actions taken by Mr. Kim, we reported his conduct to the authorities,” said Michael Wursthorn, head of communications at Galaxy.
Zero Edge: A Casino That Never Launched
Kim pitched Zero Edge as a “transparent” crypto casino that would supposedly level the playing field for gamblers. Ironically, the project never launched, and its mission—to fix gambling—ultimately collapsed under the weight of Kim’s own unresolved issues.
As of now, Kim has posted a $250,000 bond, backed in part by $100,000 in cash or property. He has not responded to recent requests for comment.
