Casino Founder Confesses: Blew $3.7M Investor Cash on Crypto Gambling!

SEC v. Richard T. Kim — U.S. Securities and Exchange Commission Litigation Release No. 26304, dated May 7, 2025.

The SEC charged Richard T. Kim, founder of Zero Edge Corporation, with defrauding investors out of approximately $3.7 million. Kim allegedly raised funds for a blockchain-based online casino but instead diverted the money for personal use, including crypto trading and online gambling, resulting in the loss of nearly all investor funds.

In Plain English

Imagine you gave money to a friend to help them start a cool new online game. They promised to use it all for the game, but instead, they took the money and gambled it away online and on the stock market. That's what happened here: a company founder took investor money meant for a new online casino and lost it on personal bets and trades.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Raising Funds for a Blockchain Casino Richard T. Kim, founder of Zero Edge Corporation, sought to raise money from investors to build an online casino powered by blockchain technology. He secured commitments totaling $5 million in a seed fundraising round between March and June 2024.
2. Investor Funds Deposited Investors placed their funds into the Zero Edge wallet. The SEC complaint states that minutes after the first investors deposited their money on June 21, 2024, Kim began to divert these funds.
3. Mass Diversion of Funds By June 24, 2024, Kim had transferred approximately $3.8 million of the raised investor funds into his personal cryptocurrency asset accounts.
4. Gambling and Trading Losses Kim allegedly used these funds for personal activities. He diverted over $2.6 million to his personal crypto asset futures trading account, losing nearly all of it. He also sent over $700,000 to an online gambling platform.
5. Further Diversions Additional funds were sent to unknown cryptocurrency wallets (over $240,000) and Kim's personal bank account (over $99,000).
6. Total Investor Loss As a result of these diversions, approximately $3.7 million of investor funds were lost. The Zero Edge platform never launched and the company is now in liquidation.
7. Confession to Investors Kim admitted to investors that he had misappropriated and lost their funds, confirming the scheme's failure and his actions.

The Enforcement Action

On May 7, 2025, the Securities and Exchange Commission charged Richard T. Kim, founder and former CEO of Zero Edge Corporation, with fraud for misappropriating approximately $3.7 million of investor funds that he raised to build a blockchain-based online casino. The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Kim with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer-and-director bar. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal complaint against Kim on April 15, 2025.

Named in this action: Richard T. Kim.

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