A former Goldman Sachs and JPMorgan executive has been indicted for allegedly gambling away investor funds, according to prosecutors. Richard Kim, a former Goldman Sachs and JPMorgan Chase executive, was indicted on securities and wire fraud charges related to his alleged misappropriation of about $4 million in investor funds for his start-up online casino company. Kim recently joined crypto merchant bank Galaxy Digital as its new COO; however, he then left it to found Zero Edge, which Galaxy then invested in.
“As alleged, Richard Kim misled investors by promising that he would build a blockchain-based casino gaming app, but ironically, Kim turned around and gambled away the very funds he said he would use to build a better casino,” said U.S. Attorney Jay Clayton. “Founders who abuse the trust of their investors threaten the integrity of our important and uniquely American venture capital market.”
More on the Investigation into Richard Kim, Zero Edge
The case against Kim relates to Zero Edge, which purportedly planned to develop a blockchain and cryptocurrency-enabled gaming app. “After obtaining investors’ funds, Kim misappropriated them by transferring them to personal accounts, where he made leveraged cryptocurrency trades and gambled away substantially all of the company’s money,” an indictment unsealed Tuesday in U.S. District Court in Manhattan reads. Allegedly, Richard Kim diverted about $3.8 million of investors’ funds shortly after closing on a $4.3 million seed financing round in June 2024, according to the indictment.
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The indictment goes on to say that the former Goldman Sachs and JPMorgan executive “concealed from the company’s investors that he had misappropriated the funds and used them at an online casino, telling investors that he had lost the money because of a ‘treasury management strategy’ rather than personal gambling.” Kim was arrested in the case on April 15 after the Manhattan U.S. Attorney’s office filed a criminal complaint in that court, before he was released on bond.
A Galaxy spokesman said, in a statement, “Richard Kim left Galaxy in March 2024 to start Zero Edge, a company in which Galaxy had an immaterial balance-sheet investment. Upon learning of certain actions taken by Mr. Kim in his role at Zero Edge, we, along with other investors, reported his conduct to the authorities.”