Former Goldman Sachs and JPMorgan Executive Indicted for Misappropriating Investor Funds for Online Casino Company

A former Goldman Sachs and JPMorgan executive, Richard Kim, has been indicted on securities and wire fraud charges for allegedly misappropriating $4 million in investor funds for his online casino company, Zero Edge. Kim diverted the funds after closing a $4.3 million seed financing round in June 2024 and gambled most of it away within a week on another site. He concealed the true reason for the loss from investors, claiming it was due to a "treasury management strategy." Kim faces a $250,000 bond and could face significant penalties if convicted.

A former executive at Goldman Sachs and JPMorgan, Richard Kim, has been charged with securities and wire fraud after allegedly misappropriating approximately $4 million in investor funds for his online casino company, Zero Edge. The charges were announced by the United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia [1].

According to the indictment, Kim founded Zero Edge in March 2024, purporting to build an app-based casino using blockchain and cryptocurrency technologies. He represented to prospective investors that Zero Edge would develop on-chain games and that their funds would be used to build the business and its technology. However, Kim allegedly misappropriated the proceeds of the company’s seed round to make speculative cryptocurrency trades and gamble at an online casino [1].

Shortly after closing on the approximately $4.3 million seed financing round, Kim diverted approximately $3.8 million of investors’ funds into a personal cryptocurrency account held at Coinbase and then sent approximately $1 million on to a variety of other crypto exchanges, including Binance, Kraken, and Backpack. He also directed a net sum of approximately $450,000 to other cryptocurrency wallets with unknown owners and transferred approximately $145,000 more from Kraken to a personal checking account [1].

Kim faces a $250,000 bond and could face significant penalties if convicted. The charges carry a maximum sentence of 20 years in prison [1].

The case highlights the importance of transparency and accountability in the venture capital market. Founders who abuse the trust of their investors threaten the integrity of this market. The FBI remains committed to apprehending any individual who leverages executive positions to defraud others for selfish purposes [1].

References:

[1] https://www.justice.gov/usao-sdny/pr/tech-company-ceo-charged-securities-and-wire-fraud-after-gambling-away-seed-round