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Former Wall Street Executive Charged with Investor Fraud in Crypto Casino Venture
According to ShibDaily, Richard Kim, a former executive at prominent Wall Street firms, has been charged by federal prosecutors with defrauding investors in his startup crypto casino, Zero Edge. The government alleges that Kim solicited over $7 million under false pretenses and misappropriated the funds, losing most through high-risk trades and gambling. Kim, who previously held positions at Galaxy Digital, Goldman Sachs, and JPMorgan Chase, was arrested on Tuesday, as detailed in court filings.
The formal complaint, filed in the Southern District of New York, accuses Kim of wire fraud and securities fraud, allegedly occurring between March and July 2024. The FBI agent's sworn statement claims Kim devised a scheme to defraud investors. Zero Edge reportedly raised over $7 million, closing a seed round around June 20, after which the alleged misappropriation began. The FBI stated Kim lost nearly all of the funds, with initial reports indicating he admitted to losing at least $3.67 million shortly after funding closed, while prosecutors later cited a figure closer to $4.3 million.
Kim attributed the losses to leveraged crypto trades during Bitcoin's June decline, citing a long-standing gambling addiction and a downward spiral. He expressed remorse, stating that after receiving the funds, he felt compelled to make up for his missteps. Kim's arrest contrasts sharply with his Wall Street and legal pedigree, having served as a general partner at Galaxy Interactive and held COO roles in trading divisions at Goldman Sachs and JPMorgan, as well as working as an attorney at Cleary Gottlieb.
Galaxy Digital, an investor in Zero Edge, reported Kim's conduct to authorities upon learning of his actions, calling their own investment immaterial. In a July interview, Kim claimed he had proactively contacted the SEC, admitting his actions were grossly negligent but denying intent to steal. The wire fraud charge involves using interstate communications to misappropriate funds, while the securities fraud count alleges Kim used manipulative and deceptive devices, including untrue statements or omissions related to securities. The U.S. Attorney's Office for the Southern District of New York is prosecuting the case, with court records indicating Kim was released on a $250,000 secured bond. Despite resigning from Zero Edge on July 2, Kim expressed his intention to repay investors.
The formal complaint, filed in the Southern District of New York, accuses Kim of wire fraud and securities fraud, allegedly occurring between March and July 2024. The FBI agent's sworn statement claims Kim devised a scheme to defraud investors. Zero Edge reportedly raised over $7 million, closing a seed round around June 20, after which the alleged misappropriation began. The FBI stated Kim lost nearly all of the funds, with initial reports indicating he admitted to losing at least $3.67 million shortly after funding closed, while prosecutors later cited a figure closer to $4.3 million.
Kim attributed the losses to leveraged crypto trades during Bitcoin's June decline, citing a long-standing gambling addiction and a downward spiral. He expressed remorse, stating that after receiving the funds, he felt compelled to make up for his missteps. Kim's arrest contrasts sharply with his Wall Street and legal pedigree, having served as a general partner at Galaxy Interactive and held COO roles in trading divisions at Goldman Sachs and JPMorgan, as well as working as an attorney at Cleary Gottlieb.
Galaxy Digital, an investor in Zero Edge, reported Kim's conduct to authorities upon learning of his actions, calling their own investment immaterial. In a July interview, Kim claimed he had proactively contacted the SEC, admitting his actions were grossly negligent but denying intent to steal. The wire fraud charge involves using interstate communications to misappropriate funds, while the securities fraud count alleges Kim used manipulative and deceptive devices, including untrue statements or omissions related to securities. The U.S. Attorney's Office for the Southern District of New York is prosecuting the case, with court records indicating Kim was released on a $250,000 secured bond. Despite resigning from Zero Edge on July 2, Kim expressed his intention to repay investors.
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