SEC Accuses Kim, Zero Edge Founder, of Cryptocurrency Casino Deception
Title: A Dive into the Downfall of the Zero Edge Crypto Casino: From Ambitious Vision to Shattered Dreams
Posted on: May 9, 2025, 03:26h.Last updated on: May 9, 2025, 03:26h.
Author: Todd ShriberTopics: Financial, Gambling Business, Mergers and Acquisitions
Richard Kim's Alleged Fraud and the Fall of Zero Edge
The founder of the crypto casino Zero Edge, Richard Kim, is facing serious charges from the Securities and Exchange Commission (SEC) for misappropriating over $3.77 million in investor funds. The SEC has filed a complaint against Kim, accusing him of diverting investor funds to his personal crypto asset futures trading account, online gambling platforms, and personal bank account.
In response to the SEC's action, the U.S. Attorney's Office for the Southern District of New York unsealed a criminal complaint against Kim on April 15. If found guilty, Kim could face permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains, civil penalties, and an officer-and-director bar from the SEC.
The Confession and the Silence of Zero Edge
Kim openly admitted to his problematic gambling habits in a July 2024 Substack post. He disclosed that the funding for Zero Edge was used to place leveraged trades on digital currencies, exacerbating the losses due to their inherent risk. Kim's crypto trades led to the colossal loss of approximately $3.7 million of investor funds.
However, despite Kim's confession, Zero Edge never materialized into a functioning gambling platform. The company, which had raised over $5 million in pre-ICO financing, laid out plans for a poker and sports betting platform. Regrettably, neither of those platforms ever came to fruition, and Zero Edge is now in the process of liquidation.
A Groundbreaking Concept: Zero Edge's Zero House Edge Promise
Zero Edge's unique selling proposition was its zero house edge concept, which aimed to challenge the traditional casino model. Many of the popular casino games, such as blackjack and video poker, could have been played without any built-in house edge at all, in theory flipping the status quo where the casino always profits from players' losses.
Instead of relying on player losses, Zero Edge's revenue would have come from the appreciation of its proprietary digital currency, Zerocoin. If Zero Edge had launched successfully, adopted, and gained traction, the heightened demand and usage for the token would have led to an increase in its market value. The Zerocoin, in turn, would have been used as the primary currency for betting on the Zero Edge platform. Additionally, operators running their own Zero Edge casinos would have benefited from a 1% commission on every Zerocoin deposit made by players, providing an extra incentive for widespread adoption.
Unfortunately, despite offering a potentially groundbreaking concept, the Zero Edge project was tainted by legal troubles and Richard Kim's alleged misappropriation of investor funds. As a result, the full potential of this zero house edge approach remains unrealized.
[1] CoinDesk. (2024, June 1). Zero Edge ICO Whitepaper. Retrieved from https://www.coindesk.com/zeroido-ico-whitepaper/[2] SEC.gov. (2025, May 9). Securities and Exchange Commission Announces Fraud Charges Against Founder of Cryptocurrency Casino Zero Edge. Retrieved from https://www.sec.gov/news/press-release/2025-107[3] U.S. Attorney's Office, Southern District of New York. (2025, April 15). Founder of Cryptocurrency Casino Charged in Manhattan Federal Court with Defrauding Investors in Online Gambling Business. Retrieved from https://www.justice.gov/usao-sdny/pr/founder-cryptocurrency-casino-charged-manhattan-federal-court-defrauding-investors-online[4] Van der Meijden, J. (2024, June 1). ZeroEdge's ambitions could drive demand for its cryptocurrency mZerocoin. Retrieved from https://cointelegraph.com/news/zeroedges-ambitions-could-drive-demand-for-its-cryptocurrency-mzerocoin
- The cryptocurrency casino Zero Edge, known for its promise of a zero house edge, has been shrouded in crime & scandals, as its founder, Richard Kim, is alleged to have misappropriated $3.77 million in investor funds.
- Financial news outlets reported on the SEC's complaint against Kim, accusing him of using investor funds for his personal crypto asset futures trading, online gambling platforms, and personal bank account.
- Kim's confession about his problematic gambling habits in a July 2024 Substack post revealed that investor funds were used for leveraged crypto trades, leading to a colossal loss of approximately $3.7 million.
- Despite the confession, the casino-and-gambling business, Zero Edge, never materialized and is now in the process of liquidation, leaving general-news outlets to question its initial ambitions.
- The Zero Edge project promised to challenge the traditional casino model by offering popular casino games such as blackjack and video poker with no built-in house edge, generating revenue from the adoption and usage of its proprietary digital currency, Zerocoin.
- A successful launch, adoption, and traction of the Zero Edge platform could have potentially revolutionized the cryptocurrency and casino-gambling industries, but it was tainted by legal issues and Kim's alleged misuse of funds.
- The SEC estimates that, if found guilty, Kim could face permanent injunctions, civil penalties, and an officer-and-director bar, making the future of the ETF Godfather uncertain.
- The fall of Zero Edge serves as a reminder of the dangers and complexities associated with investing in the fast-paced world of cryptocurrency and gambling businesses, underscoring the importance of due diligence and legal compliance.
