Crypto Casino Founder Kim Admits to Losing Investor Cash on Sour Bitcoin Bets
The creator of the cryptocurrency casino ZeroEdge, Richard Kim, acknowledged that he lost $3.67 million in investor funds due to poorly executed leveraged bitcoin trades.
Earlier this month, Kim left the fledgling gaming company. He acknowledged his transgressions and a "20-year struggle with gambling" in a lengthy Substack post. He said that a $80,000 phishing website "triggered old demons," necessitating the deployment of funds from a recent fundraising round on unsuccessful leveraged bitcoin trading.
After the losses were apparent, I quit right away and told my partner and investors what had transpired. This wasn't about combining personal and corporate cash, so I kept thorough records," Kim wrote. "I was paralyzed by fear and the desperate need to protect my reputation, which prevented me from speaking up sooner."
Kim started her bitcoin trades in June, when the biggest cryptocurrency lost over $5,000. Because leveraged trades have larger risk/reward profiles, the losses would have been more severe.
Kim Promises to Proceed
Kim admitted that he "really messed up," but he also promised to move on and assured investors that their trust in him will pay off.
“To my investors: you didn’t just back a project; you invested in my vision, my potential. I will continue building because the world desperately needs what we started,” he wrote. “It is the precise fact that I have proven untrustworthy that compels me to create trustless systems. Those who stick with me will be my lifetime beneficiaries.”
Mike Novogratz's crypto-banking company Galaxy Digital was one of the investors whose money Kim embezzled. The amount the company lost in the Zero Edge scam was insignificant, T informed crypto media sites.
Playing the victim, Kim presented his exit from ZeroEdge as an instance of "institution vs. individual, trust vs. trustlessness, company vs. community, computer vs. casino" in a tone that was rather belligerent. He went on to say that investors were supporting Kim personally, as well as his potential and vision, in addition to ZeroEdge.
What ZeroEdge's Future Holds
It's unclear what ZeroEdge's future holds now that Kim has left, but it's obvious the cryptocurrency casino was trying to use a novel idea.
"ZeroEdge.Bet is a unique blockchain-based online gambling platform with 0% house-edge casino games, commission-free sports betting exchange, and an open-source platform for parties wishing to build and operate their own games,” according to the company’s LinkedIn profile.
The popularity of cryptocurrency casinos has skyrocketed in recent years, opening up a channel for more people to embrace and use digital currencies like Bitcoin. The idea behind ZeroEdge is that bettors would utilize the Zerocoin token to place wagers, putting them in a position to benefit from the coin's possible increase in value as more players adopt the 0% house-edge model.
