Richard Kim, the founder of Zero Edge, a cryptocurrency-based online casino startup, has been arrested on April 15, 2025. Authorities allege he misappropriated nearly $7 million in investor funds for personal gambling and high-risk crypto trades, failing to use them as promised for developing his platform. The FBI complaint details how Kim misled investors by falsely claiming their money would be used for the project’s development, instead diverting it to personal accounts and online sportsbooks like Shuffle.com. Initial losses are estimated at $3.8 to $4.3 million, resulting from leveraged crypto trades during Bitcoin’s market downturn and his own gambling habits, which he attributes to a longstanding addiction, followed by a phishing scam that cost him $80,000. Kim reportedly alerted the SEC to his misconduct, expressing remorse and denying any intention to abscond with the funds before investors raised concerns, prompting law enforcement action. Kim’s case marks a significant turn in his career, which includes notable roles at major financial institutions such as Galaxy Digital, Goldman Sachs, and JPMorgan Chase. Following his resignation from Zero Edge in July 2024, he is now facing prosecution for securities fraud and wire fraud. Kim was released on $250,000 secured bond with $100,000 in cash or real estate as collateral. This case underscores the vulnerability of the crypto startup space, especially within high-risk sectors like online gambling, highlighting the need for investor vigilance, transparency, and robust regulatory oversight to prevent similar cases of financial exploitation in the future.