SEC v. Richard T. Kim, No. LR-26304, Southern District of New York (May 7, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26304 / May 7, 2025 Securities and Exchange Commission v. Richard T. Kim, No. 1:25-cv-03796 (S.D.N.Y. filed May 7, 2025) SEC Charges Richard T. Kim, Founder of Zero Edge, with Misappropriating $3.7 million On May 7, 2025, the Securities and Exchange Commission charged Richard T. Kim, founder and former CEO of Zero Edge Corporation, with fraud for misappropriating approximately $3.7 million of investor funds that he raised to build a blockchain-based online casino. According to the SEC’s complaint, between March and June 2024, Kim secured commitments of $5 million in a seed fundraising round, representing to investors that their funds would be used to develop and launch the Zero Edge platform. The complaint alleges that on June 21, 2024, minutes after the first investors placed their funds in the Zero Edge wallet, Kim began diverting those funds for his personal use. By June 24, 2024, Kim had transferred all of the approximately $3.8 million in investor funds received into his personal crypto asset accounts, according to the complaint. He allegedly diverted more than $2.6 million of investor funds to his personal crypto asset futures trading account and lost nearly all of those funds trading crypto asset futures. He also diverted more than $700,000 to his personal account on an online gambling platform, more than $240,000 to certain unknown crypto asset wallets, and more than $99,000 to his personal bank account, according to the complaint. As alleged, Kim’s actions resulted in the loss of approximately $3.7 million of investor funds, and he confessed to investors that he misappropriated and lost their funds. The Zero Edge platform never launched, and the company is now in liquidation, according to the complaint. The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Kim with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer-and-director bar. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal complaint against Kim on April 15, 2025. The SEC’s investigation was conducted by Samuel M. Kalar, Jordan Baker, and Lindsay S. Moilanen of the New York Regional Office and Elizabeth K. Canizares and Bryan Hsueh of the Cyber and Emerging Technologies Unit, under the supervision of Thomas P. Smith, Jr. of the New York Regional Office and Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit. The litigation will be led by Mr. Kalar, Ms. Canizares, and Todd Brody, under the supervision of Alex Vasilescu. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York and the FBI.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26304 / May 7, 2025 Securities and Exchange Commission v. Richard T. Kim, No. 1:25-cv-03796 (S.D.N.Y. filed May 7, 2025) SEC Charges Richard T. Kim, Founder of Zero Edge, with Misappropriating $3.7 million On May 7, 2025, the Securities and Exchange Commission charged Richard T. Kim, founder and former CEO of Zero Edge Corporation, with fraud for misappropriating approximately $3.7 million of investor funds that he raised to build a blockchain-based online casino. According to the SEC’s complaint, between March and June 2024, Kim secured commitments of $5 million in a seed fundraising round, representing to investors that their funds would be used to develop and launch the Zero Edge platform. The complaint alleges that on June 21, 2024, minutes after the first investors placed their funds in the Zero Edge wallet, Kim began diverting those funds for his personal use. By June 24, 2024, Kim had transferred all of the approximately $3.8 million in investor funds received into his personal crypto asset accounts, according to the complaint. He allegedly diverted more than $2.6 million of investor funds to his personal crypto asset futures trading account and lost nearly all of those funds trading crypto asset futures. He also diverted more than $700,000 to his personal account on an online gambling platform, more than $240,000 to certain unknown crypto asset wallets, and more than $99,000 to his personal bank account, according to the complaint. As alleged, Kim’s actions resulted in the loss of approximately $3.7 million of investor funds, and he confessed to investors that he misappropriated and lost their funds. The Zero Edge platform never launched, and the company is now in liquidation, according to the complaint. The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Kim with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an officer-and-director bar. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal complaint against Kim on April 15, 2025. The SEC’s investigation was conducted by Samuel M. Kalar, Jordan Baker, and Lindsay S. Moilanen of the New York Regional Office and Elizabeth K. Canizares and Bryan Hsueh of the Cyber and Emerging Technologies Unit, under the supervision of Thomas P. Smith, Jr. of the New York Regional Office and Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit. The litigation will be led by Mr. Kalar, Ms. Canizares, and Todd Brody, under the supervision of Alex Vasilescu. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York and the FBI.