Overview:
Richard Kim, the founder of crypto casino Zero Edge, was arrested on Tuesday due to allegations of misappropriating funds from his investors.
Key Points:
- Richard Kim, formerly associated with Galaxy, Goldman Sachs, and JP Morgan, faces charges of securities fraud and wire fraud. He reportedly lost about $7 million, much of it from misappropriation.
- In an earlier discussion with CoinDesk, Kim admitted to gambling away $3.67 million of investor funds from Zero Edge.
- He was released on a $250,000 secured bond.
Arrest Details:
Kim’s arrest stems from a FBI complaint which asserts that he misled investors about their funds, aiming to entice them into investments with Zero Edge, his cryptocurrency venture. The FBI revealed that he spent almost all of the $7 million raised, while maintaining that he posted a secured bond to facilitate his release.
Background Information:
CoinDesk highlighted issues surrounding Zero Edge back in July, where Kim acknowledged that he had lost considerable amounts through risky trading. He described a breakdown when he first fell for a phishing scam, leading to an overwhelming sense of urgency to recover losses that spiraled into concealed trading issues.
Final Note:
Kim, who had previously worked with prominent firms, claimed that his actions were not intended to defraud investors. However, as investigations proceed, the repercussions of his alleged actions become increasingly severe.
