SEC Accuses Zero Edge's Founder, Kim, of Cryptocurrency Casino Fraud
Unveiling the Flipped Casino: The Zero Edge Fiasco
Posted on: May 9, 2025, 03:26h.Last updated on: May 9, 2025, 03:26h.
Todd Shriber @etfgodfatherFinancial Gaming Business Mergers and Acquisitions The Shady Side of Crypto and Betting*
The crypto-gambling world was sent into a tailspin when the Securities and Exchange Commission (SEC) charged the founder of Zero Edge, an innovative crypto casino with no house edge, with fraud. Richard Kim, the mastermind behind Zero Edge, finds himself facing "permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer-and-director bar" as a result of his reckless spending.
Kim's actions plunged investor capital totalling an estimated $3.77 million into a cyclone of betting habits and subpar crypto trading, resulting in substantial losses. The U.S. Attorney's Office for the Southern District of New York joined forces with the SEC, bringing forward a criminal complaint against Kim on April 15, 2025.
The SEC investigation uncovered that just minutes after receiving funds from investors, Kim swiftly diverted those funds to his personal betting and crypto investing accounts, and personal bank account. Allegations claim that Kim lost nearly all of the investor funds trading crypto asset futures and on an online gambling platform, transferring a significant portion to unknown crypto wallets.
In a surprising turn of events, Kim publicly acknowledged his two-decade-long battle with gambling addiction in a July 2024 Substack post, admitting to using Zero Edge investor funds to place leveraged trades on digital currencies. He resigned from his position following the exposure of his unethical actions.
Zero Edge's vision rested on a crypto-based online casino where players would wager using Zerocoin (ZERO). With such a setup, Zero Edge sought to generate profits from the increased adoption and value of Zerocoin, rather than relying on the traditional house edge. This innovative model aimed to provide a transparent, low-fee gaming environment that would appeal to crypto enthusiasts looking to mix gambling with blockchain technology.
However, the unethical use of investor funds led to the SEC's fraud charges, and Zero Edge now stands defunct, with no poker or sports betting platforms ever coming to life. Despite the potential Zero Edge had in the booming crypto gambling landscape, Kim's actions ensured its demise.
Gambling with digital currency may have boosted the popularity of crypto casinos, but Zero Edge had the potential to be a game changer. With its unique concept of no house edges, low fees, and transparency, Zero Edge could have disrupted the traditional casino industry. Regrettably, Kim's shady dealings caused the downfall of Zero Edge, proving that sometimes, the house always wins.
Sources:
- SEC Charges Richard Kim, Founder of Zero Edge Cryptocurrency Casino, with Fraud. CoinDesk. (2025). Retrieved from https://www.coindesk.com/sec-charges-richard-kim-founder-of-zero-edge-cryptocurrency-casino-with-fraud
- SEC Charges Man Who Lost $3.7M of Investor Capital on Betting, Crypto Trading. Yahoo Finance. (2025). Retrieved from https://finance.yahoo.com/news/sec-charges-man-lost-3-7m-033000683.html
- SEC’s Fraud Charges Against Zero Edge Cryptocurrency Casino Founder. Law360. (2025). Retrieved from https://www.law360.com/securities/articles/1660602/secs-fraud-charges-against-zero-edge-cryptocurrency-casino-founder
- Zero Edge: The Cryptocurrency Casino Made for Serious Gamblers. Casino.org. (2024). Retrieved from https://www.casino.org/news/gaming-guide/zero-edge-cryptocurrency-casino/
- The founder of Zero Edge, the innovative crypto casino with no house edge, was charged with fraud by the Securities and Exchange Commission (SEC), resulting in an estimated $3.77 million in losses for investors.
- Richard Kim, the mastermind behind Zero Edge, is facing penalties, disgorgement of ill-gotten gains, and an officer-and-director bar due to his reckless spending of investment funds on financial activities, including cryptocurrency trading and gambling.
- Kim diverted funds from investors to his personal accounts and crypto wallets, with allegations suggesting he lost a significant portion of the funds through online betting and crypto trading.
- In a surprising admission, Kim publicly acknowledged his two-decade-long gambling addiction and his use of investor funds for unethical purposes in a July 2024 post.
- Zero Edge aimed to revolutionize the crypto gambling landscape with its innovative business model and crypto-based online casino, but died a defunct entity due to Kim's unethical actions.
- Despite Zero Edge's potential to disrupt the traditional casino industry, the SEC's fraud charges have proven that sometimes, the house always wins.
- The shady dealings of Kim, also known as the etfgodfather, have reminded the world of the intersection between crypto, finance, gambling, business, and criminal activities.
