The feds have charged a former top banker at Goldman Sachs and JPMorgan Chase with bilking investors out of more than $4 million — then gambling it all away while claiming he was building a cryptocurrency startup.
Richard Kim, who had served as Goldman’s chief operating officer of global foreign exchange and emerging markets trading from 2015 to 2018, allegedly lured investors with plans to develop blockchain-based casino games, according to papers filed in Manhattan federal court.
But the former financial honcho, who founded gaming company Zero Edge Corporation and served as its chief executive in the alleged fraud, instead squandered the money on personal cryptocurrency trades and online gambling, according to court papers.
An attorney for Kim, who led elite trading desks at JPMorgan before his high-level stint at Goldman, declined to comment when reached by The Post.
The 39-year-old Kim announced Zero Edge’s launch on LinkedIn in late March of last year, telling prospective backers the company would create multiple casino games starting with craps and eventually including roulette, baccarat and blackjack.
To raise cash, Kim used investor presentations and pitch materials claiming the money was for technology development. He promised oversight procedures and told backers would have decision-making power, including those involving company leaders, court documents show.
That helped Kim secure roughly $4.3 million from investors between February and July 2024, prosecutors said.
But just as he was wrapping up the funding round in late June, Kim moved about $3.8 million to his personal cryptocurrency account at Coinbase, then distributed nearly $1 million across multiple digital currency platforms including Binance, Kraken and Backpack.
He moved roughly $7 million total through various accounts — depositing the cash in an account at Shuffle.com, which markets itself as a “VIP Crypto Casino and Sportsbook.”
Even after he started gambling with investor money, Kim continued seeking additional investments, according to the charges. Kim also sent roughly $450,000 to cryptocurrency wallets belonging to unidentified individuals and moved another $145,000 from Kraken to his personal bank account at TD Bank.
It was apparently only a matter of days before Kim had squandered the funds, with Kim admitting to investors that almost all of their money had disappeared — although he stopped short of telling them exactly how.
Around June 29, 2024, he emailed backers acknowledging he was “solely responsible for the loss of $3.67 million of the Company’s balance sheet” after what he described as “leveraged trading losses from seed round financing proceeds.”
In another message to investors around July 9, 2024, Kim said he “fully acknowledge[d] the breach of trust that…occurred” and admitted “[e]ach [investor] trusted me to build something great, and I violated it at the deepest levels, all from my closest friends.”
About a week after the funding round concluded, Kim also informed a Zero Edge investor during a phone conversation that he had lost roughly $3.7 million of investor funds, according to the indictment.
Kim told investors he had engaged in “day trading” with their money, causing millions in losses until only $710,000 remained.
Prosecutors, however, say he hid the full truth from backers as he claimed he lost the funds through a “treasury management strategy” instead of admitting he had gambled it away at an internet casino.
Following his arrest on April 15, Kim acknowledged to the FBI that he knew investors “100%” would have wanted information about his trading activities and that he deliberately kept this information from them.
Kim told the FBI that “at no point did [he] think [he] should be gambling investor money on Shuffle,” calling it “clearly wrong from the beginning.”
He characterized his actions as a “betrayal” of investors and admitted his behavior was “completely unjustifiable.”
The grand jury indicted Kim on two counts: securities fraud and wire fraud.
If convicted, Kim faces several decades behind bars as well as forfeiture of all assets connected to the alleged crimes.
The Post has sought comment from Kim.
Credit: Source link
