SEC Accuses Kim, Zero Edge Founder, of Cryptocurrency Casino Deception
Published: May 9, 2025, 03:26h.
Last Updated: May 9, 2025, 03:26h.
Author: Todd Shriber @etfgodfather
Categories: Financial, Business, Gaming, Mergers, Acquisitions
Did Kim Squander Over $3.7 Million in Investor Capital on Gambling and Crypto?
That's the accusation leveled against Richard Kim, founder of Zero Edge — a cryptocurrency casino startup with an innovative edge. The Securities and Exchange Commission, or SEC, has labeled Kim's actions as fraudulent, with potential penalties including permanent bans from serving as an officer or director of a public company and heavy fines.
Kim's Alleged Missteps
According to the SEC's complaint, Kim diverted $2.6 million of investors' funds towards personal crypto asset futures trading accounts, resulting in heavy losses. Additionally, nearly $700,000 was sent to online gambling platforms, while another $240,000 and $99,000 were transferred to unknown crypto wallets and personal bank accounts, respectively. These actions led to approximately $3.7 million in investor funds being lost.
Kim admitted in a July 2024 Substack post to battling with gambling addiction for more than two decades and using investor money for leveraged trades in digital currencies. Despite these transgressions, he claimed that his misdeeds were not related to comingling Zero Edge and his personal funds, stating instead that the losses were due to his own imprudent trading decisions.
Zero Edge's Grand Vision, Now a Legal and Financial Quagmire
Pre-initial coin offering (ICO) financing had brought in over $5 million for Zero Edge, intended to fund the development of a blockchain-based online casino where players could bet with ZeroCoin (ZERO). This cryptocurrency was meant to drive the platform's revenue instead of relying on a traditional house edge. However, this vision never materialized as Zero Edge is now in the process of liquidation.
Even though Zero Edge presented a unique idea, the gaming industry has seen a surge in popularity for crypto casinos in recent years. The platform, had Kim acted ethically, could have had a significant impact on the industry by offering entirely fair and transparent gaming since there would have been no house edge in games like blackjack, video poker, and more[1][2]. Furthermore, the use of blockchain technology would have provided increased transparency, thereby instilling trust among players[4].
The alleged financial mismanagement by Kim not only resulted in the downfall of Zero Edge but also affected the crypto market since a chunk of investor funds was aimed at driving ZeroCoin's adoption and increasing its value. Given the current legal battles, it remains to be seen how this saga will unfold and whether Zero Edge's initial vision can be salvaged.
[1] CryptoGamblingNews, 2025, "Zero Edge Crypto Casino Closed Due to Mismanagement: What Went Wrong?", Link[2] Block Todo, 2025, "Review: Zero Edge Crypto Casino", Link[3] SEC Press Release, 2025, "SEC Charges Founder of Crypto Casino Zero Edge with Fraud", Link[4] Gambling Herald, 2025, "Zero Edge Crypto Casino Aims to Revolutionize Online Gambling", Link
- The financial misconduct of Richard Kim, founder of Zero Edge, a cryptocurrency casino startup, has been labeled as fraudulent by the Securities and Exchange Commission (SEC), potentially leading to legal penalties and hefty fines.
- The SEC's complaint alleges that Kim diverted $2.6 million of investor funds towards personal crypto asset futures trading accounts, resulting in heavy losses, and also sent nearly $700,000 to online gambling platforms.
- In a July 2024 Substack post, Kim admitted to battling gambling addiction for over two decades and using investor money for leveraged trades in digital currencies, yet he claimed that his misdeeds were not related to comingling Zero Edge and his personal funds.
- The downfall of Zero Edge, a cryptocurrency casino startup with an innovative edge, had a significant impact on the crypto market, as a chunk of investor funds was aimed at driving the adoption and increasing the value of ZeroCoin, its native cryptocurrency.
