Crypto Casino Founder Admits Misusing Investor Funds, Resigns
Date: 2024-08-28 Author: Leon Pierce Categories: CASINO, CRYPT
The founder of a promising crypto casino that aimed to give users the same odds as the casino has admitted that he lost a significant amount of investor funds. The platform in question is Zero Edge and its founder, Richard Kim.
Before founding Zero Edge, Kim held senior positions at Galaxy Interactive, one of the leading gaming companies run by Michael Novogratz. Kim also previously worked at Goldman Sachs and JP Morgan, as well as the renowned law firm Cleary Gottlieb.
Kim was recently forced to resign at the request of the Zero Edge board of directors. His resignation took effect on July 2. An internal email published by CoinDesk sheds light on the reasons for his departure.
Last month, on June 20, Zero Edge closed its seed funding round. However, the very next day after it closed, Kim began taking leveraged positions on cryptocurrencies. Within a few days, this resulted in significant losses for the company, as evidenced by the aforementioned letter.
In late June, Kim informed the board of directors of the losses he had incurred. According to the letter, the losses amounted to about $3.67 million. It is reported that Kim was the only one responsible for these losses.
A Careless Mistake Led to the Loss of Millions
Additional details about the incident were revealed in a post on the Substack platform. Kim explained that his downfall began with a “careless mistake” on a phishing site that cost him $80,000. He admitted that this mistake awakened his “old demons,” which led to further losses.
Kim said that after the funding round closed, “something broke.” He wrote: "I felt I had to right my wrongs. Within days, millions had been invested in leveraged positions, and when Bitcoin fell from $64,000 to $58,000, the company's treasury suffered significant losses."
Realizing the gravity of the situation, Kim confessed what had happened to his partner and the company's investors. He then immediately resigned, noting that he was paralyzed by fear and the desire to preserve his reputation, which was the reason for his belated confession.
Repentant for his actions, Kim reported himself to the US Securities and Exchange Commission. Despite admitting to "extremely careless" actions, Kim emphasized that he did not intend to abscond with investors' money.
